Supreme Court Affirms Lorenzo v. SEC, Expanding the Scope of Primary Liability for Securities Fraud

On March 27, 2019, the U.S. Supreme Court issued its decision in Lorenzo v. SEC,[i] affirming the expansive view of the U.S. Securities and Exchange Commission (“SEC” or “Commission”) that, under the right circumstances, sending out false or misleading statements alone can create liability not just for fraudulent misrepresentations under Rule 10b-5(b) of the Securities Exchange Act of 1934 (“Exchange Act”) but a fraudulent scheme under Rule 10b-5(a) and (c) as well. Lorenzo’s holding may well result in:

  • An emboldened SEC more inclined to push the boundaries of liability for fraudulent schemes under the federal securities laws;
  • Greater sanctions being available to the SEC in enforcement proceedings (including increased civil penalties, broader     application of securities industry and officer-and-director bars, and potentially fewer waivers from automatic disqualifications); and
  • Private plaintiffs feeling encouraged to bring claims that test the line between primary and secondary liability.

The Law Before Lorenzo

The Lorenzo Court’s decision focused on two separate subsections of Exchange Act Rule 10b-5, and how those subsections interact and at times overlap with each other. Rule 10b-5 is the primary antifraud tool utilized by the SEC and provides that in connection with the purchase or sale of a security, it is unlawful to:

  • 10b-5(a): employ any device, scheme, or artifice to defraud,
  • 10b-5(b): make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
  • 10b-5(c): engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

Subsection (b) of rule 10b-5 is commonly referred to as creating liability for “false statements,” whereas subsections (a) and (c) are commonly referred to in terms of “scheme liability.”[ii]

The Supreme Court indelibly shaped the contours of 10b-5(b) liability in its 2011 Janus Capital Group, Inc. v. First Derivative Traders decision.[iii] The Janus Court held that under 10b-5(b), only the “maker” of a false statement – defined as the “person or entity with ultimate authority over the statement, including its content and whether and how to communicate it” – can be subject to primary liability.[iv]

The Janus decision curtailed the SEC and private securities bar’s use of Rule 10b-5(b) in circumstances where a false statement was distributed by someone other than the maker. But, the text of Janus itself was not completely clear in the extent of its application to false statements by non-makers under provisions of the federal securities laws other than Rule 10b-5(b). As the post-Janus case law evolved, the majority of federal courts restricted the Janus “maker” requirement to only subsection 10b-5(b), and not to Section 17(a) of the Securities Act of 1933 (“Securities Act”)[v] or subsections (a) or (c) of Rule 10b-5.[vi] With respect to Rule 10b-5(a) and (c), however, much of the case law responded to Janus by further differentiating these scheme liability provisions from the false statements provisions and imposing a requirement that for scheme liability to exist, there must be some additional deceptive conduct that went beyond just misrepresentations or omissions.[vii] In contrast, the D.C. Circuit held in its decision in Lorenzo that knowingly distributing another’s false statements, without more, could form the basis for a fraudulent scheme.[viii]

The Supreme Court resolved this split last week in Lorenzo, when it held that the “dissemination of false or misleading statements with an intent to defraud can fall within the scope of subsections (a) and (c) of Rule 10b-5 … even if the disseminator did not ‘make’ the statements” and is therefore not liable under Rule 10b-5(b).[ix] But how the Supreme Court arrived at this conclusion may well be a result of “bad facts” (in this case egregious underlying conduct) resulting in an expansive view of the law. As the Court itself stated, Lorenzo’s conduct was “plainly fraudulent.”[x]

The Background

The history of the Lorenzo decision is fairly straightforward, but ends with a political plot twist that led many to expect a rare 4-4 tie at the Supreme Court.

The Commission’s case addressed conduct by Francis “Frank” V. Lorenzo in 2009, when Lorenzo worked as the director of investment banking at a New York broker-dealer.[xi] Lorenzo himself described his firm as a “small boiler room” where brokers used “high pressure sales” tactics and were known by some to “stretch[] the truth” with customers.[xii] Lorenzo’s only client at the time was a start-up energy entity, Waste2Energy Holdings, Inc. (“W2E”) that purported to be developing technology to generate electricity from solid waste.[xiii] In order to finance its operations, W2E was offering up to $15 million in convertible debentures, which are general, unsecured debt obligations of the issuer.[xiv]

Lorenzo conceded to the SEC during its investigation that he knew W2E’s purported technology “didn’t really work.”[xv] Lorenzo further acknowledged that by early October, he knew that W2E’s “intellectual property was worthless” and that it had total assets worth less than $400,000.[xvi] Despite this knowledge, Lorenzo continued to seek investors for the debentures – for which he would receive commissions of between 7 to 9 percent.[xvii]

On October 14, 2009, Lorenzo sent two emails describing the debenture offering to prospective investors he was soliciting.[xviii] Lorenzo’s argument, which the Supreme Court accepted for review, was that these two emails were “sent at the direction of [Lorenzo’s] boss, who supplied the content and ‘approved’ the messages.”[xix] The emails falsely represented to prospective investors that the W2E investment had “‘3 layers of protection,’ including $10 million in ‘confirmed assets.’”[xx] Despite conceding that he knew the information regarding $10 million in assets was false, Lorenzo sent the emails under his own name, listed his title as “Vice President—Investment Banking,” and “invited recipients to ‘call with any questions.’”[xxi]

In 2013 the Commission instituted proceedings against Lorenzo not in federal court, but before the agency’s in-house administrative tribunal.[xxii] The Commission charged Lorenzo with violations of Section 10(b) and Rule 10b-5 of the Exchange Act, along with Section 17(a)(1) of the Securities Act.[xxiii] In her December 2013 order, the administrative law judge found that Lorenzo had violated the antifraud provisions as charged, holding that he “knew the truth about W2E’s parlous financial condition” when he sent the two emails, which the administrative law judge found to be “staggering” in their “falsity.”[xxiv] The administrative law judge ordered Lorenzo to cease and desist from future violations, imposed a $15,000 civil penalty, and permanently barred Lorenzo from working in the securities industry.[xxv]

Lorenzo first appealed the administrative law judge’s order to the full Commission, which in April of 2015 sustained the administrative law judge’s order in its entirety.[xxvi] Lorenzo thereafter appealed the Commission’s order against him to the D.C. Circuit Court of Appeals, arguing that that he could not be liable for violating Rule 10b-5(b) because he was not, under Janus, the “maker” of the false statements.[xxvii] The D.C. Circuit agreed with Lorenzo, holding that Lorenzo’s boss – who “asked Lorenzo to send the emails, supplied the central content, and approved the messages for distribution” – was the individual with “ultimate authority” over the false statements.[xxviii] Hence, Lorenzo was not the “maker” under Janus, and the D.C. Circuit reversed the Commission.[xxix]

Lorenzo also argued to the D.C. Circuit that because he was not the “maker” of the false statements at issue, his mere re-broadcast, or cutting-and-pasting, of his boss’s statements, could not, per Janus, make him liable under Rule 10b-5 subsections (a) or (c) either. The D.C. Circuit held that even though Lorenzo “was not the ‘maker’ of the false statements,” he still “‘engaged’ in a fraudulent ‘act’ and ‘employed’ a fraudulent ‘device’ when, with knowledge of the statements’ falsity and an intent to deceive, he sent the statements to potential investors carrying his stamp of approval as investment banking director.”[xxx]

The D.C. Circuit’s holding on this point though was not unanimous. The dissenting judge lambasted the SEC’s decision as a “debacle” that utilized “alternative facts,” and that required a “wafer-thin semantic distinction” to be supportable.[xxxi] As for the dissenter’s colleagues in the majority who affirmed the SEC’s decision, he equated their holding with “legal jujitsu.”[xxxii] The dissenter also sided with the majority of the courts of appeal on record in concluding that “scheme liability must be based on conduct that goes beyond a defendant’s role in preparing mere misstatements … made by others.”[xxxiii]

The dissenting judge thought was not long for the D.C. Circuit. By the time the case made its way to the U.S. Supreme Court, the former dissenting judge had become Justice Brett Kavanaugh. His role in the D.C. Circuit decision, however, meant that he would not be participating in the Supreme Court’s review of the Lorenzo appeal, leading many to question whether the circuit split would remain a circuit split following a rare 4-4 tie at the Supreme Court.[xxxiv]

The Issue

Lorenzo sought review only as to “whether a misstatement claim that does not meet the elements set forth in Janus can be repackaged and pursued as a fraudulent scheme claim.”[xxxv] In contrast to Lorenzo’s casting of the case as one of repackaging a failed Janus false statements claim as a scheme liability claim, the SEC framed the case as whether one “who knowingly disseminates false or misleading statements” can be found to have violated the scheme liability provisions of the securities laws.[xxxvi]

The Holding

Despite many predictions of a 4-4 tie, a 6-2 majority of the Supreme Court affirmed the D.C. Circuit, relying in part on what it viewed as the common meaning of “device,” “scheme, “and artifice to defraud” and in part on what it viewed as egregious, “plainly fraudulent” conduct.[xxxvii] The Supreme Court held that by “sending emails he understood to contain material untruths,” Lorenzo violated the scheme liability provisions of Rule 10b-5 subsections (a) and (c).[xxxviii]

Given the Supreme Court’s starting point – which Lorenzo did not contest on appeal – that he had acted with “‘an intent to deceive, manipulate, or defraud,’” it seems far from surprising that the Court adopted the SEC’s view of the law.[xxxix] The majority in Lorenzo was not shy in voicing its disdain for Lorenzo’s actions, finding “nothing borderline about this case, where [Lorenzo] disseminat[ed] false and misleading information to prospective investors with the intent to defraud.”[xl]

The majority’s decision also announced a shift from the narrow, limiting approach of Janus and a return to the SEC’s broad view that the subsections of Rule 10b-5 are not mutually exclusive, and instead have “considerable overlap” and at times “prohibit some of the same conduct.”[xli] The majority dismissed any concerns about the role of aiding-and-abetting versus primary liability, reasoning that it is far from unusual for conduct to be charged both as a primary violation of one rule or statute and as aiding-and-abetting another.[xlii]

The Dissent

The dissent, authored by Justice Thomas and joined by Justice Gorsuch, conceptualized both the facts and the law quite differently. As opposed to the majority’s description of Lorenzo as a “knowing disseminator,” the dissent viewed Lorenzo as one whose conduct was of an “essentially administrative nature,” having “cut and pasted” email content belonging to his boss.[xliii]

Legally, the dissent found the majority’s expansive interpretation of Rule 10b-5(a) and (c) would render the specific language of Rule 10b-5(b) “entirely superfluous” – essentially asking that if disseminating a misstatement is a fraudulent scheme under 10b-5(a) and (c), why would there need to be a separate provision for false statements liability in Rule 10b-5(b) at all?[xliv] Moreover, if Rule 10b-5(b) is not distinct in its purpose, then in the dissenters’ view the Court’s holding in Janus would become a “dead letter.”[xlv] The dissent also found the majority’s holding unnecessary in light of the availability to the SEC of aiding-and-abetting liability.[xlvi]

The Take-Aways

An Emboldened SEC Enforcement Program

Beyond being a significant victory in its own right, Lorenzo was something of a return to form for an agency that had suffered numerous Supreme Court losses of late. Recent key Supreme Court decisions had called into question the viability of the SEC’s administrative forum,[xlvii] imposed previously unapplied statutes of limitations on both civil penalties[xlviii] and disgorgement,[xlix] and significantly restricted the agency’s definition of a “whistleblower.”[l]

The Janus decision, though, and its narrowing of the scope of the SEC’s primary antifraud rule may have had the most significant impact on the SEC’s enforcement program – restricting the universe of potential defendants and leading the SEC to more reflexively bring aiding-and-abetting charges. But Lorenzo’s broad, almost prudential reading of the securities laws and its allusion to Capital Gains’ concern with “achiev[ing] a high standard of business ethics in the securities industry” may well lead to an SEC that is far more willing to aggressively push the margins of the securities laws through its enforcement program.[li]Lorenzo is unlikely to result in the wholesale filing of what would previously have been unsupported SEC enforcement actions, but it is likely to lead to the SEC bringing new counts charging primary liability, especially under Rules 10b-5(a) and (c), which have rarely been used on a stand-alone basis in the past. These additional primary antifraud violations could result in the SEC obtaining even more significant sanctions against future defendants.

More Penalties, More Bars, Fewer Waivers

The SEC’s sanctions toolbox typically consists of injunctions (for federal court actions) and cease-and-desist orders (for administrative proceedings), penalties, disgorgement, and conduct-based sanctions barring individuals from the securities industry (as with Lorenzo) or from serving as officers or directors of public companies.[lii]

The SEC’s statutory authority to impose civil penalties contains a dizzying number of provisions that are far from consistently implemented, with penalty amounts varying based on the degree of intent, investor losses, and the gross number of violations committed.[liii] Primary antifraud violations under Rule 10b-5 quite often result in penalties being imposed at the highest level, while aiding-and-abetting violations relating to the identical misconduct may lead to a lesser penalty. To the extent that the SEC now may charge conduct as a primary violation of 10b-5(a) and (c), rather than as aiding-and-abetting a 10b-5(b) violation, the new primary charge may well result in higher penalties even though the underlying fraudulent conduct is the same.

Furthermore, in determining whether to impose securities industry or officer-and-director bars, courts frequently reference a list of judge-made factors.[liv] Though the factors for the differing bars are not identical, they overlap with respect to the egregiousness of the underlying conduct, the scienter involved, and the likelihood of similar misconduct in the future.[lv] As the Supreme Court’s holding in Lorenzo makes it more likely that a defendant will be charged with primary liability, the needle will move with respect to evaluating egregiousness, scienter, and the number of violations involved. Hence, the burden upon the SEC to justify the imposition of a securities industry or officer-and-director bar will correspondingly move in its favor following Lorenzo.

Beyond the sanctions that the SEC affirmatively seeks in enforcement actions, there are a host of automatic disqualifications that can result from a person or entity having been found to have violated the antifraud provisions of the federal securities laws. These disqualifications typically relate to the ability to use streamlined securities offerings procedures, to employ safe harbors for forward looking statements, or to act as an investment adviser or investment company.[lvi] Although the distinction between primary and aiding-and-abetting violations may not be as relevant to the triggering of these disqualifications, the process to seek a waiver from the impact of these disqualifications often turns on an evaluation of the egregiousness of the underlying misconduct. As with civil penalties and bars, an increase in the total number of violations, or a primary violation being charged as opposed to just an aiding-and-abetting violation, can only make it more difficult to obtain waivers from disqualification in these sorts of circumstances in the future.

Private Securities Class Actions

The Lorenzo decision could also impact private securities class actions by encouraging shareholders to bring claims against a broader range of actors who did not “make” false statements, but allegedly disseminated those statements. The Court previously has held that private securities litigants cannot bring Rule 10b-5 claims against secondary actors who aid and abet a primary actor[lvii] or against secondary actors upon whom investors do not primarily rely under a scheme liability theory.[lviii] As then-Judge Kavanaugh observed in his Lorenzo dissent, there is a “distinction between primary and secondary liability matters, particularly for private securities lawsuits,” and the Court previously “pushed back hard against” attempts to erase that distinction.[lix]

Although Lorenzo may encourage plaintiffs to bring claims that test the line between primary and secondary liability, and to pursue claims against individual defendants not previously named in securities class actions, the implications of the case should be limited by its facts. Lorenzo intentionally sent emails to prospective investors despite knowing that the information contained in them was false.[lx] The Court’s observation that this was not a “borderline” case of securities fraud stands in stark contrast to most private securities class actions, where the issues of falsity and scienter are frequently unclear and challenged at the motion to dismiss stage.[lxi] The Court also noted that “one can readily imagine other actors tangentially involved in dissemination — say, a mailroom clerk — for whom liability would typically be inappropriate.”[lxii] As a result, there are grounds for arguing that Lorenzo does not reach actors who, unlike Lorenzo, are further removed from the fraudulent conduct or did not act with the requisite scienter. And Lorenzo does not affect the various hurdles the Private Securities Litigation Reform Act imposes on private Section 10(b) class action claims, including the requirements that plaintiffs plead a strong inference of scienter and state their falsity claims with particularity.

Final Thoughts

An emboldened SEC with greater sanctions potentially at its disposal and an opportunity for private plaintiffs to more aggressively pursue their claims directly impacts the risk to financial services firms and public market issuers. Lorenzo only serves to increase the need for experienced, measured, and thoughtful responses to SEC investigative demands and private securities class actions.

[i] Lorenzo v. SEC, 587 U.S. ___, 2019 WL 1369839 (Mar. 27, 2019).

[ii] See, e.g., SEC v. Kelly, 817 F.Supp.2d 340, 343-44 (S.D.N.Y. 2011).

[iii] 564 U.S. 135 (2011).

[iv] Id., at 142.

[v] 15 U.S.C. § 77q (Securities Act Section 17(a) makes it unlawful, in the offer or sale of a security:  “(1) to employ any device, scheme, or artifice to defraud, or (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser”).

[vi] See, e.g., SEC v. Strebinger, 114 F.Supp.3d 1321, 1330-31 (N.D. Ga. 2015) (explaining that Janus only applies to Rule 10b-5(b) and that “Janus did not alter the potential for liability under Rule 10b-5(a) and (c)” (internal citations omitted); SEC v. Benger, 931 F.Supp.2d 904, 906 (N.D. Ill. 2013) (“[T]he vast majority of courts dealing with the question of whether Janus also applies to claims under Section 17 have answered that question with a resounding ‘no.’”).

[vii] See, e.g., SEC v. Familant, 910 F.Supp.2d 83, 93 (D.D.C. 2012) (“At least three circuit courts have held that ‘scheme liability’ is viable only if Rule 10b–5(b) cannot fully cover the deceptive acts – that is, the ‘scheme’ must include deceptions beyond misrepresentations and omissions.”).

[viii] Lorenzo v. SEC, 872 F.3d 578, 595 (D.C. Cir. 2017).

[ix] Lorenzo, 2019 WL 1369839 at *4.

[x] Id., at *6.

[xi] Id., at *3; Brief for Petitioner, Lorenzo v. SEC, No. 17-1077 (U.S. Aug. 20, 2018), p. 8.

[xii] Joint Appendix, Lorenzo v. SEC, 17-1077 (U.S. Aug. 20, 2018), pp. 301, 352.

[xiii] Lorenzo, 872 F.3d at 581.

[xiv] Id.; Lorenzo, 2019 WL 1369839 at *3.

[xv] Joint Appendix, at pp. 192, 197-98.

[xvi] Lorenzo, 2019 WL 1369839 at *3.

[xvii] Joint Appendix, at p. 277.

[xviii] Lorenzo, 2019 WL 1369839 at *3.

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Id.  Lorenzo did not raise on appeal any of the issues addressed by the Supreme Court in its Lucia v. SEC, 138 S.Ct. 2044 (2018) decision concerning the constitutionality of the SEC’s administrative law judges.

[xxiii] In the matter of Gregg C. Lorenzo, et al., SEC Release No. 9385, Order Instituting Proceedings (Feb. 15, 2013).

[xxiv] In the matter of Gregg C. Lorenzo, et al., SEC AP File No. 3-15211, Initial Decision, J. Foleak (Dec. 31, 2013), pp. 6, 9.

[xxv] Id., at 12.

[xxvi] In the matter of Francis V. Lorenzo, SEC Release No. 9762, Comm. Op. (Apr. 29, 2015). 

[xxvii] Lorenzo, 2019 WL 1369839 at *3–4.

[xxviii] Id.

[xxix] Id.

[xxx] Lorenzo, 872 F.3d at 595.

[xxxi] Id., at 598, 599, 600 n.2.

[xxxii] Id., at 598, 599, 601.

[xxxiii] Id., at 600 (“The majority opinion creates a circuit split by holding that mere misstatements, standing alone, may constitute the basis for so-called scheme liability under the securities laws – that is, willful participation in a scheme to defraud – even if the defendant did not make the misstatements.  No other court of appeals has adopted the approach that the majority opinion adopts here. Other courts have instead concluded that scheme liability must be based on conduct that goes beyond a defendant’s role in preparing mere misstatements or omissions made by others.”).

[xxxiv] See, e.g., Yahoo! Finance, Kavanaugh’s Recusal in Securities Fraud Case Could be Good News for the SEC (Dec. 4, 2018) (available at finance.yahoo.com/news/kavanaughs-recusal-securities-fraud-case-good-news-sec-155737417.html) (“If the case ties, as [Professor John Coffee] suspects it will, then a lower court ruling that was largely in favor of the SEC will stand — bucking a current trend in the Supreme Court of cutting back on securities litigation.”).

[xxxv] Petition for Writ of Certiorari, Lorenzo v. SEC, (U.S. Jan. 26, 2018), p. i.

[xxxvi] Brief for the Respondent in Opposition, Lorenzo v. SEC, (U.S. May 2, 2018), p. I.

[xxxvii] Lorenzo, 2019 WL 1369839 at *4, *6.

[xxxviii] Id., at *4.

[xxxix] Lorenzo, 2019 WL 1369839 at *4 (quoting Aaron v. SEC, 446 U.S. 680, 686 n.5 (1980)).

[xl] Lorenzo, 2019 WL 1369839 at *5.

[xli] Id., at *5 (quoting Herman & MacLean v. Huddleston, 459 U.S. 375, 383 (1983)).

[xlii] Id., at *7.

[xliii] Id., at *7, *9, and *10.

[xliv] Id., at *11.

[xlv] Id., at *12.

[xlvi] Id.

[xlvii] Lucia, et al. v. SEC, 138 S.Ct. 2044 (2018).

[xlviii] Gabelli v. SEC, 568 U.S. 442 (2013).

[xlix] Kokesh v. SEC, 137 S.Ct. 1635 (2017)

[l] Digital Realty Trust, Inc. v. Somers, 138 S.Ct. 767 (2018).

[li] Lorenzo, 2019 WL 1369839 at*9 (quoting SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 186 (1963)).

[lii] See, e.g., Steven Peikin, Remedies and Relief in SEC Enforcement Actions, Speech before the Practicing Law Institute (Oct. 3, 2018) (available online at: www.sec.gov/news/speech/speech-peikin-100318).

[liii] See 15 U.S. Code § 77t (Securities Act Section 20, providing for civil penalties and identifying different tiers of penalties based on underlying conduct); 15 U.S.C. § 78u (Exchange Act Section 21, providing for civil penalties and identifying different tiers of penalties based on underlying conduct).

[liv] See, e.g., Lowry v. SEC, 340 F.3d 501, 504-05 (8th Cir. 2003) (listing factors to evaluate securities industry bars); SEC v. Patel, 61 F.3d 137, 140-42 (2d Cir. 1995) (listing factors to evaluate officer-and-director bars).

[lv] Id.

[lvi] See, e.g., 15 U.S.C. § 77z–2 (Private Securities Litigation Reform Act, defining eligibility for safe harbor for forward looking statements); 15 U.S.C. § 80a-9 (Section 9(a) of the Investment Company Act of 1940, defining ineligible statuses); 17 C.F.R. § 230.405 (Securities Act Rule 405, defining well-known seasoned issuer); 17 C.F.R. § 230.506 (Securities Act Rule 506(d), defining “Bad Actor” disqualification); and 17 C.F.R. § 230.602 (Securities Act Rule 602, defining ineligible issuers).

[lvii] Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994).

[lviii] Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008).

[lix] Lorenzo, 872 F.3d at 601 (Kavanaugh, J., dissenting) (citing Central Bank and Stoneridge).

[lx] Lorenzo, 2019 WL 1369839 at *3–4.

[lxi] Id., at *5.

[lxii] Id.

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JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.