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Leslie Bonacum

Wolters Kluwer Law & Business Special Briefing Outlines New Supreme Court Ruling on Investment Adviser Liability

(RIVERWOODS, ILL., June 14, 2011) – Wolters Kluwer Law & Business has issued a special, in-depth Briefing – providing guidance and insight to the Supreme Court’s new decision regarding the liability of investment advisers, the Court’s strong reaffirmance of the Central Bank ruling on Rule 10b-5 and aiding and abetting liability. To read the Briefing, “Supreme Court Reaffirms Central Bank Ruling in Important Rule 10b-5 Decision,” please click here. Wolters Kluwer Law & Business is the leading provider of information and software solutions in key specialty areas for legal and business professionals (

“This is the most significant and far reaching in its impact of any Supreme Court securities ruling this term,” said Wolters Kluwer Law & Business Principal Federal Securities Law Analyst Jim Hamilton, JD, LLM. “Basically, the Court is saying it will not waver from its previous decision that Rule 10b-5’s implied private right of action does not include actions against aiders and abettors.”

In a 5-4 opinion, the high court ruled that a mutual fund investment adviser cannot be held liable in a private action under Rule 10b-5 for false statements included in its client mutual funds’ prospectuses.

In Janus Capital Group, Inc. v. First Derivatives Traders, (U.S. Supreme Court, docket No. 09-525), the Court ruled that the adviser did not make any of the statements in the prospectuses, the fund did, and only the fund had the statutory duty to file the prospectuses with the SEC. The Court stated that any reapportionment of liability in the securities industry in light of the close relationship between investment advisers and mutual funds is properly the responsibility of Congress and not the courts.

The Court emphasized that for the Central Bank rule to have any meaning, there must be some distinction between those who are primarily liable (and may be pursued in private suits) and those who are secondarily liable (and may not be pursued in private suits). The Court has drawn a clean line between the two – the statement issuer is the person or entity with ultimate authority over that statement and others are not.

For More Information

Members of the press interested in speaking with Wolters Kluwer Law & Business securities and banking law experts should contact Eric Scott at 847-267-2179,

For a copy of the Briefing and links to more free information resources, please visit the Wolters Kluwer Law & Business News Center by clicking here.

Additional financial news can be found at the Financial Reform News Center at The Center provides the legal community and others with a cohesive and robust selection of new developments and analysis. 

Additionally, Jim Hamilton’s World of Securities Regulation offers unique analysis on securities law and regulation. 

About Wolters Kluwer Law & Business

Wolters Kluwer Law & Business is the leading provider of information and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include health care organizations, law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill. Wolters Kluwer is a market-leading global information services company.

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