Paul Weiss Discusses Second Circuit Ruling on Liability Under Rule 10b-5(a) and (c)

On July 15, 2022, the Second Circuit held[1]  in SEC v. Rio Tinto plc,[2] that the Supreme Court’s ruling in Lorenzo v. SEC[3] did not abrogate the rule in the Second Circuit that alleged misrepresentations and omissions cannot be the “sole basis”[4] for liability under Rule 10b-5(a) and (c).

In Lorenzo, the Supreme Court held that a person who disseminates materially misleading statements with the intent to defraud investors can be held primarily liable under Section 17(a)(1) of the Securities Act, Section 10(b) of the Securities Exchange Act, and SEC Rule 10b-5(a) and (c), … Read more