Supreme Court of the United States

Name: Francis V. Lorenzo v. Securities and Exchange Commission
Author: Supreme Court of the United States

Francis V. Lorenzo v. Securities and Exchange Commission (2019)

Summary

“Francis V. Lorenzo v. Securities and Exchange Commission”, published in 2019, is a work by Supreme Court of the United States. It explores elements such as Lorenzo, fraudulent misstatements and fraud.

Quotes from Francis V. Lorenzo v. Securities and Exchange Commission (Supreme Court of the United States)

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ Our conviction is strengthened by the fact that we here confront behavior that, though plainly fraudulent, might otherwise fall outside the scope of the Rule. Lorenzo’s view that subsection (b) , the making-false-statements provision, exclusively regulates conduct involving false or misleading statements would mean those who disseminate false statements with the intent to cheat investors might escape liability under the Rule altogether. But using false representations to induce the purchase of securities would seem a paradigmatic example of securities fraud. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ The majority suggests that secondary liability may often prove illusory. It hypothesizes, for example, a situation in which the “maker” of a false statement does not know that it was false and thus does not violate Rule 10b5 (b) , but the disseminator knows that the statement is false. Under that scenario, the majority fears that the person disseminating the statements could be “engaged in an egregious fraud,” yet would not be liable as an aider and abettor for lack of a primary violator. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ It is undisputed here that Lorenzo was not the maker of the fraudulent misstatements. The majority nevertheless finds primary liability under different provisions of Rule 10b–5, without any real effort to reconcile its decision with Janus. Although it “assume [s] that Janus would remain relevant (and preclude liability) where an individual neither makes nor disseminates false information,” in the next breath the majority states that this would be true only if “the individual is not involved in some other form of fraud.” ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ Lorenzo claims that imposing primary liability upon his conduct would erase or at least weaken what is otherwise a clear distinction between primary and secondary (i. e., aiding and abetting) liability. He emphasizes that, under today’s holding, a disseminator might be a primary offender with respect to subsection (a) of Rule 10b–5 (by employing a “scheme” to “defraud”) and also secondarily liable as an aider and abettor with respect to subsection (b) (by providing substantial assistance to one who “makes” a false statement) . ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ The Court correctly notes that it is not uncommon for the same conduct to be a primary violation with respect to one offense and aiding and abetting with respect to another—as, for example, when someone illegally sells a gun to help another person rob a bank. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ For purposes of any action brought by the Commission..., any person that knowingly or recklessly provides substantial assistance to another person in violation of a provision of this chapter, or of any rule or regulation issued under this chapter, shall be deemed in violation of such provision to the same extent as the person to whom such assistance is provided. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ Lorenzo then filed a petition for certiorari in this Court. We granted review to resolve disagreement about whether someone who is not a “maker” of a misstatement under Janus can nevertheless be found to have violated the other subsections of Rule 10b–5 and related provisions of the securities laws, when the only conduct involved concerns a misstatement. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, or any securities-based swap agreement [,] any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ The Court attempts to cabin the implications of its holding by highlighting several facts that supposedly would distinguish this case from a case involving a secretary or other person “tangentially involved in disseminat [ing] ” fraudulent misstatements. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ As an initial matter, I note that §17 (a) (2) does not require scienter, so the maker of the statement may still be liable under that provision. Aaron, supra, at 695–697. Moreover, an ongoing, “egregious” fraud is likely to independently constitute a primary violation of the conduct-based securities laws, wholly apart from the laws prohibiting fraudulent misstatements. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ John, for example, might sell Bill an unregistered firearm in order to help Bill rob a bank, under circumstances that make him primarily liable for the gun sale and secondarily liable for the bank robbery. ”

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Source: Wikisource

Supreme Court of the United States, Francis V. Lorenzo v. Securities and Exchange Commission (2019)

“ The majority’s interpretation of these provisions cannot be reconciled with their text or our precedents. Thus, I am once again compelled to “disagre [e] with the SEC’s broad view” of the securities laws. Janus, supra, at 145, n. 8.
A
I begin with the text. The Court of Appeals held that Lorenzo violated §10 (b) of the 1934 Act and Rules 10b–5 (a) and (c) . In relevant part, §10 (b) makes it unlawful for a person, in connection with the purchase or sale of a security, “ [t] o use or employ... ”

Supreme Court of the United States

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