The Supreme Court continues to limit private rights of action under the Securities Exchange Act of 1934 (Exchange Act) Section 10(b) and Rule 10b 5. In Janus Capital Group, Inc. v. First Derivative Traders, a significant victory for mutual fund sponsors, the Court ruled that shareholders can seek Rule 10b-5 redress only against parties with “ultimate authority”1 over a statement in controversy. Although the Court’s opinion intimates that fund advisors may be liable under other theories of liability, it ruled that a legally separate advisor entity cannot be viewed as having “made” the false statements in the fund entity’s prospectus and, therefore, cannot be held directly liable under Rule 10b-5 where the fund entity has the ultimate authority over the false statements. This is a bright line test that should limit mutual fund advisor liability in Rule 10b-5 private actions — but not necessarily actions by the Securities and Exchange Commission.