This Article examines the current state of the Rule 10b-5 right of action following a constricting trilogy of Supreme Court cases that have rendered it a myopic remnant of the right previously endorsed by the United States Securities and Exchange Commission (the “SEC”) and hundreds of courts over a span of numerous decades. The Roberts Court’s pronouncement in Janus Capital Group, Inc. v. First Derivative Traders has generated an immense amount of criticism and a slew of conflicting lower court decisions. By effectively abolishing most private Rule 10b-5 claims against secondary actors, including lawyers, accountants, credit rating agencies, underwriters and securities analysts, and by mistakenly including mutual fund investment managers in the class of ordinary secondary actors, the Court has chosen a short-sighted, ill-reasoned standard that ignores the doctrinal foundations of the Securities Exchange Act of 1934 (the "1934 Act"), as well as the practical realities and traditional bases of mutual fund law and practice.
Kelly S. Kibbie,
Currently Mandated Myopia of Rule 10b-5: Pay No Attention to That Manager behind the Mutual Fund Curtain, The ,
78 Mo. L. Rev.
Available at: https://scholarship.law.missouri.edu/mlr/vol78/iss1/5