- Category
- Client Alerts
- Date
- March 26, 2010
- Title
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Securities Litigation Alert: First Circuit En Banc Rejects 10b-5 Theory of Primary Liability for Securities Professionals Based on "Implied Statements"
On March 10, 2010, the First Circuit, en banc, in SEC v. Tambone, reversed in part a prior panel and held that primary liability under Rule 10b-5 does not extend to underwriters who had disseminated, but were not the authors of, a mutual fund prospectus. In so doing, the court rejected the SEC’s theory that an underwriter “makes” an “implied” representation, actionable under Rule 10b-5, that it reasonably believes the material disclosures in a prospectus are true and complete. The First Circuit concluded that for liability to be imposed under Rule 10b-5, an individual must actually make the statement at issue and not simply distribute or employ a representation authored by another.
Media Attachments
Related People
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Arthur H. Aufses III
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- Counsel
- Co-author
- New York
- vcard
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Alan R. Friedman
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- Counsel
- Co-author
- New York
- vcard
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