Aiding and Abetting Liability Under State Securities Statutes
In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008), the U.S. Supreme Court firmly closed the door on plaintiffs seeking to sue on the basis of aiding and abetting for federal securities fraud under Section 10(b) of the Securities Exchange Act of 1934. Building on an earlier decision in which it held that Section 10(b) did not impose aiding and abetting liability, Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164 (1994), the Court clarified that secondary actors involved in securities transactions cannot be held liable based on the “scheme liability” theory. The Stoneridge decision was tremendously comforting to many professionals involved in securities transactions, such as attorneys and accountants, who had much to fear from an expansion of potentially devastating civil liability for federal securities fraud.
This article first appeared in For the Defense magazine.