Supreme Court to Once Again Examine Limits of Rule 10b-5 Liability in October Term 2018 Case “Lorenzo v. SEC”

bainbridgeFeatured Expert Contributor, Corporate Governance/Securities Law

Stephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law.

Rule 10b-5 long has been the centerpiece of the Securities and Exchange Commission’s antifraud enforcement efforts. At times, in fact, the SEC’s interpretation of the Rule has been so broad that the rule threatened to “become a universal solvent, encompassing not only virtually the entire universe of securities fraud, but also much of state corporate law.”[1] In a long series of cases, however, the U.S. Supreme Court has gradually imposed a series of important limits on the SEC’s scope.[2] By taking cert in Lorenzo v. SEC, the Court has given itself an opportunity to impose another such limit. Continue reading “Supreme Court to Once Again Examine Limits of Rule 10b-5 Liability in October Term 2018 Case “Lorenzo v. SEC””