Forum
U.S. Supreme Court
Case Status
Decided
Docket Number
09-525
Term
2010 Term
Oral Argument Date
December 07, 2010
Lower Court Opinion
Questions Presented
1. Whether a service provider can be held primarily liable in a private securities-fraud action for "help[ing]" or "participating in" another company’s misstatements.
2. Whether a service provider can be held primarily liable in a private securities-fraud action for statements that were not directly and contemporaneously attributed to the service provider?
Case Updates
Supreme Court holds that service providers cannot be held liable under securities laws
June 13, 2011
Held: Because the false statements included in the prospectuses were made by Janus Investment Fund, not by Janus Capital Management (the investment fund adviser), JCM and its parent, Janus Capital Group, cannot be held liable in a private action under Rule 10b–5
U.S. Chamber files amicus brief
September 10, 2010
NCLC urged the Supreme Court to hold that U.S. securities laws do not allow private individuals to sue service providers such as lawyers, accountants, and investment advisers, for allegedly false or misleading statements made by others. A 2003 class action lawsuit against a mutual fund service provider claims that the company should be held liable for the alleged misstatements made by an advisor. In its brief, NCLC argued that the Fourth Circuit's decision conflicts with established Supreme Court precedent that the implied private right of action under the securities laws should not be extended by the courts beyond what was available when Congress enacted the Private Securities Litigation Reform Act (PSLRA) in 1995. NCLC warned that if the Fourth Circuit's ruling is left to stand, American businesses will face a new era of potentially ruinous securities class action litigation.