• Fourth Circuit Holds That Investment Adviser and Public Company Parent May Face Federal Securities Law Liability for False Statements in Mutual Fund's Prospectus; Discusses Test for Attribution Requirement
  • June 24, 2009
  • Law Firm: Kramer Levin Naftalis & Frankel LLP - New York Office
  • The federal courts have recently addressed two related liability questions under Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5: first, what exactly constitutes the "making" of a purported misstatement for purposes of those provisions, and second, to what extent can a party be held responsible for a statement not explicitly attributed to it? A number of Courts of Appeals have taken a literal approach to these issues, limiting liability to those who actually make statements, or to whom statements are attributed at the time of their public dissemination.