Scheme Liability After Stoneridge

Law360, New York (July 18, 2008, 12:00 AM EDT) -- Since the Supreme Court held in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994), that private plaintiffs have no cause of action for aiding and abetting under Section 10(b), a major trend in securities litigation against secondary actors has been the effort to impose “scheme liability” under Rule 10b-5(a) and (c).

The Supreme Court’s recent decision in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 128 S. Ct. 761 (2008), disapproved of one such attempt, but lawyers for plaintiffs...
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