{"id":5165,"date":"2011-06-11T00:00:00","date_gmt":"2011-06-11T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/06\/us_supreme_court_declines_revi"},"modified":"2022-04-04T13:39:01","modified_gmt":"2022-04-04T18:39:01","slug":"us-supreme-court-declines-revi","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/us-supreme-court-declines-revi\/","title":{"rendered":"US Supreme Court Declines Review of Appeals Court Rulings Involving Issues of Antifraud Liability and Institutional Investment Managers\u2019 Disclosure Obligations"},"content":{"rendered":"

The nation\u2019s highest court has decided not to review three federal appeals court rulings that brought up the securities law issues of disclosure obligations and antifraud liability. The cases are Amorosa v. Ernst & Young LLP<\/em>, Pacific Investment Management Co. v. Mayer Brown LLP<\/em>, and Full Value Advisors LLC v. SEC<\/em>.<\/p>\n

In the liability case against Ernst & Young, the U.S. Court of Appeals for the Second Circuit held that the district court was correct in turning down the investor\u2019s lawsuit, which alleged fraudulent accounting practices at America Online and later at AOLTime Warner. The court had found that the plaintiff failed to adequately allege loss causation.<\/p>\n

The appeals court also affirmed the dismissal of the second liability-related securities fraud case<\/a>, this one against Mayer Brown LLP, over the latter\u2019s alleged involvement in the fraud at Refco Inc. The court concluded that secondary actors can only be held liable for false statements that they made at the time it issued them (this finding rejected the SEC\u2019s broader view of liability for secondary actors in securities fraud cases) and that without attribution the plaintiffs cannot demonstrate that they depended on the defendants\u2019 false statements. The court also said that \u201cparticipation in the creation of those statements amounts, at most, to aiding and abetting securities fraud.\u201d<\/p>\n

In Full Value Advisors LLC v. SEC<\/em>, the U.S. Court of Appeals for the District of Columbia Circuit had found that the hedge fund adviser\u2019s constitutional challenge to the SEC\u2019s disclosure requirements for large investment advisers was not ripe for judicial review. This ruling prevented the plaintiff from receiving a ruling on the merits of its claims unless the SEC puts together a report that is accessible to the public and includes the allegedly proprietary information.<\/p>\n

Pacific Investment Management Co. v. Mayer Brown LLP<\/a><\/p>\n

Full Value Advisors LLC v. SEC<\/a> (PDF)<\/p>\n


\nMore Blog Posts:<\/strong>
\nSEC Securities Settlements Often Don\u2019t Come with Admission of Wrongdoing, Institutional Investors Securities Blog, March 29, 2011<\/p>\n

CalPERS Files Securities Fraud Lawsuit Against Lehman Brothers<\/a>, Institutional Investors Securities Blog, February 10, 2011<\/p>\n

Securities Fraud: Mutual Funds Investment Adviser Cannot Be Sued Over Misstatement in Prospectuses, Says US Supreme Court<\/a>, Stockbroker Fraud Blog, June 16, 2011<\/p>\n

 <\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The nation\u2019s highest court has decided not to review three federal appeals court rulings that brought up the securities law issues of disclosure obligations and antifraud liability. The cases are Amorosa v. Ernst & Young LLP, Pacific Investment Management Co. v. Mayer Brown LLP, and Full Value Advisors LLC v. SEC. In the liability case […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3741],"tags":[],"class_list":["post-5165","post","type-post","status-publish","format-standard","hentry","category-securities-fraud"],"yoast_head":"\nUS Supreme Court Declines Review of Appeals Court Rulings Involving Issues of Antifraud Liability and Institutional Investment Managers\u2019 Disclosure Obligations — Investor Lawyers Blog — June 11, 2011<\/title>\n<meta name=\"description\" content=\"The nation\u2019s highest court has decided not to review three federal appeals court rulings that brought up the securities law issues of disclosure — June 11, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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