Lies and Schemes: Supreme Court Expands Securities Fraud Liability [April 24, 2019] [open pdf - 644KB]
From the Document: "The Supreme Court recently held in 'Lorenzo v. Securities and Exchange Commission' that persons who knowingly disseminate false statements to investors violate the 'scheme liability' provisions of federal securities law even if they do not have ultimate authority over the content of those statements. In reading the scheme liability provisions to reach this conduct, the Court expanded the scope of 'primary' securities fraud liability and, by extension, the range of defendants that private plaintiffs can sue for fraud. The Court's decision--which bucks a trend of recent opinions narrowing the anti-fraud provisions of the securities laws--highlights a longstanding debate over the proper scope of private causes of action under those provisions. This Sidebar discusses the Court's decision in 'Lorenzo' and its implications for Congress."
CRS Legal Sidebar, LSB10293
Congressional Research Service: https://crsreports.congress.gov/