In Lorenzo v. SEC, Lorenzo disseminated false information that his boss provided to him, and which he knew was false, regarding the value of a company pursuant to a debenture offering. The SEC charged him with having violated Rule 10b-5 of the Securities and Exchange Commission, which makes it unlawful to (a) “employ any device, scheme, or artifice to defraud,” (b) “make any untrue statement of a material fact,” or (c) “engage in any act, practice, or course of business” that “operates . . . as a fraud or deceit” regarding the purchase or sale of securities. In the prior case of Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011), the Court held that section (b) does not apply to a person who merely participated in the drafting of a false statement, as the maker of such a statement had to be one who had “ultimate authority” over it. The D.C. Circuit held that Lorenzo was not liable under (b) as a “maker” under Janus, as he did not draft the statement, but still could be liable under the other two options for his conduct. The Court, in an opinion by Justice Breyer (with Justice Kavanaugh recused), affirmed, holding that sections (a) and (c) “capture a wide range of conduct” that easily included Lorenzo’s actions, and refused to read the sections as addressing mutually exclusive spheres of action. Thus, instead of being held secondarily liable as an aider or abettor of fraudulent conduct, Lorenzo faced primary liability for passing along his boss’s statements. Justice Thomas, joined by Justice Gorsuch, dissented, arguing that the majority’s ruling was far too broad, and turned Janus into a “dead letter.”

A link to the opinion is here.