Securities Law | Expert Legal Commentary
April 26, 2010
SEC v. Tambone: SEC’s Effort to Expand Primary Liability Rejected
SEC v. Tambone
By
Josh Lawler of Zuber & Taillieu and Joel B. Ginsberg
Sitting en banc, the First Circuit has rejected the SEC’s argument that Rule 10b-5(b) allows for primary liability for defendants’ “implied misrepresentations” to their customers. In SEC v. Tambone, 597 F.3d 436 (2010), the First Circuit focused on the meaning of the word “make” as used in Rule 10b-5(b), finding that merely “using” a statement that was originated by another party is not the same thing as “making” that statement. At most, such use could only subject a defendant to secondary liability for aiding and abetting, not primary liability.
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About the Author
Josh Lawler is a Partner of Zuber & Taillieu, focusing on corporate law and securities and finance law.
Image Credit: ©iStockphoto.com/ adam36
