The Supreme Court of the United States's recent decision in Stoneridge rewrote the law of reliance in securities-fraud damage actions without settling the question of the viability of "scheme liability" claims under subsection (a) of rule lOb-5. This Paper argues that scheme liability necessarily exists for the simple reason that section 10(b) is a valid statute that undeniably authorizes the SEC to issue rule lOb-5, which, in turn, clearly makes it illegal "[tlo employ any device, scheme or artifice to defraud." Nothing in Stoneridge is to the contrary. The Paper then attempts to divine the future scope of that right to sue, arguing for a generous interpretation of scheme liability and analyzing post-Stoneridge lower court decisions.
Description
The Continuing Evolution of Securities Class Actions Symposium
