The web is full of legal analysis of the opinion, but the impact can be summarized in two sentences from the opinion- “dissemination of false or misleading statements with intent to defraud can fall within the scope of subsections (a) and (c) of Rule 10b-5, as well as the relevant statutory provisions. In our view, that is so even if the disseminator did not ‘make’ the statements and consequently falls outside subsection (b) of the Rule.”
The SEC’s win at the Supreme Court in Lorenzo v. Securities and Exchange Commission, No. 17-1077 (March 27, 2019) will provide a significant benefit to the SEC in its enforcement program, but more importantly to class action participants.
In other words, while you cannot be charged for aiding and abetting, you can be charged for distributing someone else’s false or misleading statement.
Mark J. Astarita, Esq. has represented investors and brokers in SEC enforcement proceedings as well as in class action litigation, and investors who decide to opt-out of class action cases. To discuss a potential case with him, email him at firstname.lastname@example.org