Lorenzo v. SEC

Lorenzo v. Securities and Exchange Commission
Supreme Court of the United States
Argued December 3, 2018 Decided March 27, 2019
Full case name	Francis V. Lorenzo v. Securities and Exchange Commission
Docket no.	17-1077
Citations	587 U.S. (more) 139 S. Ct. 1094; 203 L. Ed. 2d 484
Opinion announcement	Opinion announcement
Case history
Prior	872 F.3d 578 (D.C. Cir. 2017); cert. granted, 138 S. Ct. 2650 (2018)
Holding
A defendant can be held civilly liable by the SEC for participating in a securities fraud scheme by distributing false statements, even if those statements were written by another person.
Court membership
Chief Justice John Roberts Associate Justices Clarence Thomas · Ruth Bader Ginsburg Stephen Breyer · Samuel Alito Sonia Sotomayor · Elena Kagan Neil Gorsuch · Brett Kavanaugh
Case opinions
Majority	Breyer, joined by Roberts, Ginsburg, Alito, Sotomayor, Kagan
Dissent	Thomas, joined by Gorsuch
Kavanaugh took no part in the consideration or decision of the case.
Laws applied
Securities Exchange Act of 1934

Lorenzo v. Securities and Exchange Commission, 587 U.S. ___ (2019), was a United States Supreme Court case from the October 2018 term.

The Supreme Court held that someone who disseminates false statements to potential investors with the intent to defraud those investors can be held liable under subsection b of Rule 10b-5 of the Securities Exchange Act of 1934, even if they personally were not the ones who drafted the false statements.^[1]

This decision clarifies the applicability of the 2011 holding in Janus Capital Group, Inc. v. First Derivative Traders to individuals who disseminate false statements made by others. That decision had held that subsection (b) of Rule 10b-5 (which prohibits "mak[ing] any untrue statement of a material fact") applies only to the individual who personally drafted the false statements; this decision clarifies that other individuals who participate in the fraud scheme can be held liable under other subsections of Rule 10b-5.

It also marked one of the rare recent occasions in which the Securities and Exchange Commission prevailed in front of the Supreme Court, after defeats in prior cases including Gabelli v. SEC (2013), Kokesh v. SEC (2016), and Lucia v. SEC (2018).^[2]