The U.S. Supreme Court building stands in Washington, D.C., U.S., on Friday, April 7, 2017. Photographer: Andrew Harrer/Bloomberg
The U.S. Supreme Court reinforced the Securities and Exchange Commission's powers, upholding sanctions against an investment banker found to have duped investors about a startup company's financial condition.
The justices, voting 6-2, said Francis V. Lorenzo, who worked at Charles Vista LLC, could be held liable for taking part in a scheme to defraud investors even if he didn't write two deceptive emails at the center of the case.
(Related: SEC Ends Losing Streak at SCOTUS, Over Thomas and Gorsuch Dissent)
The ruling, which upholds a federal appeals court, halts a trend of Supreme Court rulings that had trimmed the SEC's authority. The decision also bolsters the rights of private investors, giving them more power to press lawsuits claiming deception.
"Congress intended to root out all manner of fraud in the securities industry," Justice Stephen Breyer wrote for the majority. "And it gave to the commission the tools to accomplish that job."
Justices Clarence Thomas and Neil Gorsuch dissented. Writing for the two, Thomas said that Lorenzo "might have assisted in a scheme, but he did not himself plan, scheme, design or strategize." Such a person still could be held liable for aiding and abetting, Thomas wrote.
