The Supreme Court heard oral arguments on Tuesday in the case of Janus Capital Group v. First Derivative Traders, watched closely by advisors and members of the mutual fund industry.
At issue is whether a service provider can be held primarily liable in a private securities-fraud action for "helping" or "participating in" another company's misstatements. Also at issue is whether a service provider can be held primarily liable in a private securities-fraud action for statements that were not directly and contemporaneously attributed to the service provider.
The SCOTUS Blog puts it in plain English.
"When a corporation makes false statements in a prospectus in violation of federal securities laws, can victims also sue companies that assisted the corporation in writing the prospectus?" according to blogger Nabiha Syed.
