Highly anticipated opinion extends primary liability for securities fraud beyond the “maker” of false statements.

Key Points:

..The Court held that a defendant’s act of sending emails drafted by another, that the defendant understood to contain material untruths, was sufficient to establish that the defendant employed a “device,” “scheme,” or “artifice to defraud” or an “act, practice or course of business” that “operates ... as a fraud or deceit” under Rule 10b-5(a) and (c), § 10(b) of the Securities Exchange Act, and § 17(a)(1) of the Securities Act.

..The Court’s decision has implications for any party involved in the “dissemination” of information to investors, regardless of whether he or she “made” the statement. This is of particular significance to bankers and other investment professionals who may “cut and paste” the statements of others. However, the decision does not affect the requirement that to be liable for securities fraud, the person disseminating the information must have intent to defraud.

..The Court noted that its 2011 Janus1 ruling may remain relevant (and preclude liability) if “an individual neither makes nor disseminates false information — provided, of course, that the individual is not involved in some other form of fraud.”2

..The Court recognized that applying Rule 10b-5(a) and (c) may “present problems of scope in borderline cases,” creating the likelihood of intense factual inquiry in lower courts.