Clarifying Accountants’ Secondary Liability

Law360, New York (August 8, 2011, 1:26 PM EDT) -- The June 13, 2011, United States Supreme Court decision in Janus Capital Group v. First Derivative Traders, 2011 (June 13, 2011) provides long-awaited clarity on the question of whether outside accountants can be held liable in a private action under Section 10(b) of the Securities Exchange Act of 1934 or Rule 10b-5 promulgated thereunder when they perform quarterly reviews or provide comments on draft press releases and U.S. Securities and Exchange Commission filings.

In a 5-4 ruling, the court held that because Janus Capital Management (“JCM”),...
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