July 1, 2010

Supreme Court To Address Primary Liability

In what is shaping up to be a blockbuster term for securities litigation cases, the U.S. Supreme Court will address the issue of primary liability.

On Monday, the Court granted cert (over the objection of the government) in the Janus Capital Group v. First Derivative Traders case. In Janus, the Fourth Circuit found that to establish primary liability it is sufficient for a plaintiff to adequately allege (a) the defendant "participated" in the making of a false statement, and (b) "interested investors would have known that the defendant was responsible for the statement at the time it was made, even if the statement on its face is not directly attributable to the defendant." The defendants argued in their cert peition, apparently with some success, that both prongs of this holding created or exacerbated circuit splits.

SCOTUSBlog has links to the cert petition papers. The official "questions presented" can be found here.

Posted by Lyle Roberts at July 1, 2010 10:12 PM | TrackBack
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