128 S.Ct. 761 (2008)
- The Eighth Circuit correctly ruled that the allegations did not show respondents made misstatements relied upon by the public or that they violated a disclosure duty.
- The § 78j(b)implied private right of action did not extend to aiders and abettors.
- Respondents had no role in preparing or disseminating the financial statements.
- Respondents had no duty to disclose and their deceptive acts were not communicated to the public.
- No member of the investing public had knowledge of respondents' deceptive acts during the relevant times.
- Thus, reliance could not be shown except in an indirect chain that was too remote for liability.
- The company, not respondents, misled its auditor and filed fraudulent financial statements.
- Nothing respondents did made it necessary or inevitable for the company to record the transactions as it did, thus, the investors' "scheme liability" theory failed.
- In 15 U.S.C.S. § 78t(e), Congress amended the securities laws to provide for limited coverage of aiders and abettors, in actions to be brought by the Securities and Exchange Commission, but not by private parties.
- Concerns with the judicial creation of a private cause of action cautioned against its expansion.
The judgment of the Eighth Circuit was affirmed.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials