Craft & Sheppard's Supreme Court Review
Securities
In Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., the Court held that the implied private right of action under § 10(b) of the 1934 Securities Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 CFR § 240.10b-5 (2007), did not typically impose liability on firms that aid and abet securities fraud. Here, Charter and its customers and suppliers arranged to allow Charter to issue misleading financial statements that affected stock price. Reliance is a necessary element of a 10b-5 claim. Since the investors did not rely upon the representations of Charter’s customers and suppliers, they had no Rule 10b-5 claim. The dissenters wrote that the High Court for a generation rarely has found implied private causes of action, a result at odds with the Court's traditional historic role.
