PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 13-6814

THOMAS T. PROUSALIS, JR.,

Petitioner - Appellant,

v.

CHARLES E. MOORE, Senior U.S. Probation Officer,

Respondent – Appellee.

Appeal from the United States District Court for the Eastern 

District of Virginia, at Richmond. John A. Gibney, Jr., 

District Judge. (3:12-cv-00134-JAG)

Argued: March 19, 2014 Decided: May 7, 2014

Before TRAXLER, Chief Judge, and WILKINSON and KEENAN, Circuit 

Judges. 

Affirmed by published opinion. Judge Wilkinson wrote the 

opinion, in which Judge Keenan joined. Chief Judge Traxler wrote 

an opinion concurring in the result.

ARGUED: Scott Martin, GIBSON, DUNN & CRUTCHER, LLP, Washington, 

D.C., for Appellant. Jonathan Holland Hambrick, OFFICE OF THE 

UNITED STATES ATTORNEY, Richmond, Virginia, for Appellee. ON 

BRIEF: Dana J. Boente, Acting United States Attorney, OFFICE OF 

THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.
2

WILKINSON, Circuit Judge:

Appellant Thomas Prousalis Jr. pled guilty to three counts 

arising from his fraudulent activity in connection with a 

client’s initial public offering. He now seeks habeas relief, 

contending that, in light of the Supreme Court’s intervening 

decision in Janus Capital Group, Inc. v. First Derivative 

Traders, 131 S. Ct. 2296 (2011), the conduct for which he was 

convicted is no longer criminal. For the following reasons, we 

reject Prousalis’s claims and affirm the dismissal of his 

petition.

I.

Thomas Prousalis was a securities lawyer who marketed his 

services to small firms seeking to raise capital. At issue here 

is his representation of Busybox.com, Inc. (Busybox), an 

internet company that he guided through the process of 

conducting an initial public offering (IPO). Despite Busybox’s 

modest size and limited cash flow, Prousalis persuaded company 

management to agree to an initial offering of over $10 million. 

Prousalis’s retainer agreement provided that he would be 

compensated the greater of $375,000 or 7.5 percent of the gross 

proceeds; notably, his fee was contingent upon the successful 

closing of the IPO. To effectuate the transaction, Busybox also 

hired Barron Chase Securities, Inc., an investment banking firm, 

which agreed to provide a firm commitment underwriting. This 
3

agreement obligated Barron Chase to purchase all of the 

available Busybox shares and then resell them to the public.

Prousalis prepared the IPO registration materials, which 

were subsequently signed by Busybox officers and filed with the 

Securities and Exchange Commission (SEC). The materials stated 

that Busybox intended to raise $12.8 million in gross proceeds 

through the offering, with net receipts of $10.6 million. The 

forms also reported Prousalis’s legal fee, but failed to 

acknowledge the contingent nature of his compensation. When 

Busybox’s CEO attempted to correct the registration statement to 

accurately reflect Prousalis’s retainer agreement, Prousalis 

insisted that the existing description was compliant and that 

the SEC had confirmed its sufficiency. Prousalis later admitted 

in his plea allocution that he knew at the time that Busybox 

would not be listed on the NASDAQ exchange if his compensation 

arrangement were accurately disclosed.

Prousalis soon became aware that Barron Chase was unwilling 

to complete a firm commitment underwriting of the IPO. Barron 

Chase’s failure to uphold its end of the bargain generated a 

shortfall of $2.5 million in the IPO as originally conceived. To 

solve this problem, Prousalis orchestrated a scheme in which IPO 

proceeds were recycled in order to purchase shares that were 

then used both to compensate him (in a sum unrelated to his 

retainer agreement) and to pay salaries and bonuses to Busybox 
4

officers. Prousalis failed to disclose these maneuvers to the 

SEC. Only after the initial offering was made did he reveal to 

Busybox officers the existence of the shortfall and his proposed 

remedy. The judge presiding over Prousalis’s earlier collateral

proceeding noted that “Prousalis specifically admitted that at 

the time he did each of these acts he knew he was doing 

something wrong, knew he was acting in violation of the law, and 

was acting with the intent to deceive and defraud investors in 

Busybox securities.” Prousalis v. United States, Nos. 06 Civ. 

12946(DLC), 03 CR. 1509, slip op. at 5 (S.D.N.Y. Aug. 24, 2007).

As a result of these activities, Prousalis was indicted in 

the Southern District of New York on three counts. Count One 

charged conspiracy to commit securities fraud, wire fraud, and 

mail fraud (in violation of 15 U.S.C. §§ 78j(b), 78ff; 17 C.F.R. 

§ 240.10b-5; 18 U.S.C. §§ 371, 1343, 1346, 1341). Count Two 

charged securities fraud (in violation of 15 U.S.C. §§ 78j(b), 

78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2). Finally, Count 

Three charged “failure to disclose interest of counsel” in the 

registration materials Prousalis prepared in connection with the 

IPO (in violation of 15 U.S.C. § 77x; 17 C.F.R. § 228.509; 18 

U.S.C. § 2). J.A. 225-49. As relevant for purposes of this 

appeal, Prousalis’s convictions hinged in large part on his 

violation of SEC Rule 10b-5, which implements Section 10(b) of 

the Securities Exchange Act of 1934. The Rule provides:
5

It shall be unlawful for any person, directly or 

indirectly, by the use of any means or instrumentality 

of interstate commerce, or of the mails or of any 

facility of any national securities exchange . . . [t]o 

make any untrue statement of a material fact or to omit 

to state a material fact necessary in order to make the 

statements made, in the light of the circumstances 

under which they were made, not misleading . . . in 

connection with the purchase or sale of any security.

17 C.F.R. § 240.10b-5. 15 U.S.C. § 78ff subjects certain 

violators of Rule 10b-5 to criminal penalties. 15 U.S.C. 

§ 78ff(a) (“Any person who willfully violates any provision of 

this chapter . . . or any rule or regulation thereunder the 

violation of which is made unlawful . . . shall upon conviction 

be fined not more than $5,000,000, or imprisoned not more than 

20 years, or both . . . .”).

Trial commenced but was aborted when Prousalis agreed to 

plead guilty to each count pursuant to a plea agreement. The 

district court subsequently sentenced Prousalis to 57 months of 

imprisonment, followed by three years of supervised release. He 

was also ordered to pay $12.8 million in restitution. Prousalis 

appealed to the Second Circuit but lost on the basis of the 

appeal waiver contained in his plea agreement. J.A. 460. In 

2006, he filed a petition for collateral review under 28 U.S.C. 

§ 2255, alleging ineffective assistance of counsel and Fifth and 

Sixth Amendment violations. The district court denied his 

petition and the Second Circuit affirmed the dismissal. 
6

Pursuant to the savings clause of 28 U.S.C. § 2255, 

Prousalis later filed a habeas petition in the Eastern District 

of Virginia -- the site of his supervised release -- under 28 

U.S.C. § 2241, naming his probation officer as respondent. As 

explained below, Prousalis is only eligible for relief under 

§ 2241 if the conduct for which he was originally convicted is 

no longer deemed criminal. The district court denied his motion, 

citing two alternative rationales. First, it concluded that the 

decision upon which Prousalis relies, Janus, has no application 

in the criminal context. Second, it determined that Prousalis 

pled guilty to charges -- such as aiding and abetting -- that 

fall outside the substantive scope of the Janus decision, which 

only addresses primary liability under the securities laws. The 

court thus concluded that Prousalis’s petition constituted an 

“unauthorized, successive § 2255” motion and dismissed for lack 

of jurisdiction. J.A. 557. This appeal followed. 

II.

Prousalis may file a habeas petition under § 2241 only if 

the collateral relief typically available under § 2255 “is 

inadequate or ineffective to test the legality of his 

detention.” 28 U.S.C. § 2255(e). This standard is satisfied 

when:

(1) [A]t the time of conviction, settled law of this 

circuit or the Supreme Court established the legality 

of the conviction; (2) subsequent to the prisoner’s 
7

direct appeal and first § 2255 motion, the substantive 

law changed such that the conduct of which the 

prisoner was convicted is deemed not to be criminal; 

and (3) the prisoner cannot satisfy the gatekeeping 

provisions of § 2255 because the new rule is not one 

of constitutional law.

In re Jones, 226 F.3d 328, 333-34 (4th Cir. 2000). The parties 

here agree that conditions (1) and (3) are satisfied. 

Prousalis bases his argument under prong (2) on the Supreme 

Court’s decision in Janus, which was handed down subsequent to 

his direct appeal and § 2255 motion. In that case, the Court 

defined what it means to “make” an untrue statement in the 

context of a private action alleging a Rule 10b-5 violation. 

According to the Court, “the maker of a statement is the person 

or entity with ultimate authority over the statement, including 

its content and whether and how to communicate it.” Janus, 131 

S. Ct. at 2302. It added that “[w]ithout control, a person or 

entity can merely suggest what to say, not ‘make’ a statement in 

its own right. One who prepares or publishes a statement on 

behalf of another is not its maker.” Id. The Court analogized 

its rule to the relationship between a speaker and speechwriter: 

“Even when a speechwriter drafts a speech, the content is 

entirely within the control of the person who delivers it. And 

it is the speaker who takes credit -- or blame -- for what is 

ultimately said.” Id.
8

Prousalis contends that, under Janus, he does not qualify 

as the “maker” of any false statements contained in Busybox’s 

registration materials. Instead, Busybox itself -- the entity 

with the ultimate legal authority over the SEC filings -- is the 

maker for purposes of 10b-5. If this interpretation of Janus is 

correct, then Prousalis arguably stands condemned (at least in 

part) of conduct which is no longer deemed criminal. On the 

other hand, Prousalis’s convictions unquestionably remain valid 

if his reading of Janus is mistaken. He does not contest that 

his guilty pleas were legitimate at the time they were entered 

and remain so in the absence of Janus. For the reasons that 

follow, we find Janus inapplicable outside the context of the 

10b-5 implied private right of action. That case thus does not 

affect Prousalis’s criminal convictions. Because his convictions 

are proper under current law, his § 2241 petition necessarily 

fails.*

A.

Neither Section 10(b) of the Securities Exchange Act nor 

SEC Rule 10b-5 explicitly provides for a private right of action 

to enforce the prohibitions established therein. Nevertheless, 

 * Because we find that Janus does not apply to Prousalis’s 

criminal convictions, we need not reach the government’s 

alternative argument that his convictions are sustainable on a 

theory of secondary liability, the requirements for which were 

not affected by Janus.
9

in Superintendent of Insurance v. Bankers Life & Casualty Co., 

the Supreme Court stated that the existence of such a right was 

“established.” 404 U.S. 6, 13 n.9 (1971). The precise scope of 

this judicially created cause of action has been the source of 

continuing disagreement. See, e.g., Stoneridge Inv. Partners, 

LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008); Cent. Bank 

of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 

U.S. 164 (1994). The Supreme Court’s general inclination over 

the past several decades has been to restrict the right; 

Congress, similarly, has declined to expand it. See, e.g.,

Janus, 131 S. Ct. at 2302; Alexander C. Krueger-Wyman, Note, 

Making a Statement About Private Securities Litigation: The 

Merits and Implications of the Supreme Court’s Janus Capital

Case, 98 Va. L. Rev. 1621, 1621 (2012).

The Janus opinion itself makes clear the limits of its 

reach. Janus concerned the ability of a private plaintiff 

invoking the 10b-5 implied right to sue a mutual fund investment 

adviser. Janus, 131 S. Ct. at 2299. The scope of the Court’s 

opinion was established at the outset: “We granted certiorari to 

address whether [the adviser] can be held liable in a private 

action under Rule 10b–5 for false statements included in [its 

client’s] prospectuses.” Id. at 2301 (emphasis added). Moreover, 

the Court’s reasoning -- like its framing of the issue --

indicates that its holding was confined to cases invoking the 
10

implied private right of action and does not extend to the 

criminal convictions at issue here. Several points merit 

particular attention.

First, the Court stated that its rule “follows from Central 

Bank of Denver, . . . in which we held that Rule 10b–5’s private 

right of action does not include suits against aiders and 

abettors.” Id. at 2302. The Janus Court reasoned that a more 

expansive interpretation of primary liability under the implied 

right would functionally render aiders and abettors a null set, 

thus draining the Central Bank decision of any concrete impact. 

Id. In this respect, Janus works in tandem with Central Bank to 

impart a coherent structure to the 10b-5 implied cause of 

action. The reasoning in both decisions is born out of concerns 

specific to the implied civil right since, as the parties agree, 

aiding and abetting is plainly available under the criminal law. 

Central Bank in fact makes the distinction explicit: “while it 

is true that an aider and abettor of a criminal violation of any 

provision of the 1934 Act, including § 10(b), violates 18 U.S.C. 

§ 2, it does not follow that a private civil aiding and abetting 

cause of action must also exist.” Central Bank, 511 U.S. at 190.

Second, the Janus Court also relied heavily on Stoneridge, 

another decision involving the scope of the 10b-5 private 

action. In that case, plaintiffs sued “entities who, acting both 

as customers and suppliers, agreed to arrangements that allowed 
11

the investors’ company to mislead its auditor and issue a 

misleading financial statement affecting the stock price.” 

Stoneridge, 552 U.S. at 152-53. Relevantly, the Stoneridge Court 

observed that “nothing [defendants] did made it necessary or 

inevitable for [the company] to record the transactions as it 

did.” Id. at 161. The Janus Court found this logic compelling, 

noting that, unless a bad actor possesses ultimate authority, it 

is not “necessary or inevitable” that the falsehoods he 

propagates will appear in any final statement filed with the 

SEC. Janus, 131 S. Ct. at 2303 (internal quotation marks 

omitted). 

Janus thus meshes seamlessly with the reasoning of the 

Supreme Court’s recent 10b-5 private right of action cases. In 

all three decisions (Central Bank, Stoneridge, and Janus), the 

context is everything. Apart from its specific dependence on 

Central Bank and Stoneridge, however, the Janus opinion evinces 

a general desire to circumscribe implied causes of action. At 

the outset, the Court observes that: 

“Concerns with the judicial creation of a private 

cause of action caution against its expansion.” Thus, 

in analyzing whether [defendant] “made” the statements 

for purposes of Rule 10b–5, we are mindful that we 

must give “narrow dimensions . . . to a right of 

action Congress did not authorize when it first 

enacted the statute and did not expand when it 

revisited the law.” 
12

Id. at 2302 (quoting Stoneridge, 552 U.S. at 165, 167) (internal 

alteration and citations omitted). The Court summarizes its 

analysis by noting, “Our holding also accords with the narrow 

scope that we must give the implied private right of action.” 

Id. at 2303. These concerns are specific to the dangers of 

judicially implied causes of action. Nowhere is there the 

suggestion that criminal sanctions for security fraud violations 

would be similarly imperiled.

Prousalis argues in rebuttal that Janus rested primarily on 

a straightforward reading of Rule 10b-5’s text, and that the 

Court’s desire to limit the implied right merely confirmed its 

textual conclusion. In support of this argument he highlights 

Janus’s statement that the word “make” in Rule 10b-5 is 

“not . . . ambiguous.” Id. at 2304 n.8. 

But this and similar language only reinforce our analysis. 

Any textual conclusion announced in this particular area of law 

would not be casually generalizable to the criminal context 

which, as discussed below, presents a wholly different set of 

issues. “[T]he meaning of statutory language, plain or not, 

depends on context.” King v. St. Vincent’s Hosp., 502 U.S. 215, 

221 (1991). A facially ambiguous or vague word can be rendered 

determinate by the setting in which it appears. See FDA v. Brown 

& Williamson Tobacco Corp., 529 U.S. 120, 132 (2000) (“The 

meaning -- or ambiguity -- of certain words or phrases may only 
13

become evident when placed in context.”). Petitioner’s position 

would render the Supreme Court’s discussion of private rights of 

action largely superfluous. We decline to disfigure the Court’s 

analysis of civil actions by wrenching its conclusion from the 

distinctive contextual considerations that gave it birth. 

B.

Our interpretation of Janus is further supported by 

considerations of judicial restraint and legislative primacy. 

The Janus Court’s discomfort with implied rights of action 

reflected the fact that “[t]he regulation of access to the 

courts is largely a legislative task, and one that courts should 

hesitate to undertake.” Smith v. Reagan, 844 F.2d 195, 201 (4th 

Cir. 1988). As Stoneridge emphasized, “In the absence of 

congressional intent the Judiciary’s recognition of an implied 

private right of action . . . . runs contrary to the established 

principle that the jurisdiction of the federal courts is 

carefully guarded against expansion by judicial interpretation.” 

552 U.S. at 164 (internal quotation marks and alteration 

omitted). “For this reason, implied rights of action are 

disfavored, and will not be found in the absence of clear 

evidence of legislative intent.” Smith, 844 F.2d at 201.

It is not just that judicially created causes of action are 

disfavored. It is that congressional control of federal court 

jurisdiction and, more specifically, of the elements of federal 
14

criminal offenses have long been respected. As a result, the 

Court’s willingness to constrict an implied civil right tells us 

very little about its views regarding the scope of a 

congressionally authorized action lying squarely within the 

legislature’s traditional prerogative to prescribe crimes and 

ranges of punishment. See United States v. Lanier, 520 U.S. 259, 

265 n.5 (1997) (noting “the deference due to the legislature, 

which possesses the power to define crimes and their 

punishment”). A part of the Janus Court’s unease stemmed, as 

noted earlier, from the fact that the case involved “a right of 

action Congress did not authorize when it first enacted the 

statute and did not expand when it revisited the law.” Janus, 

131 S. Ct. at 2302 (quoting Stoneridge, 552 U.S. at 167) 

(internal quotation marks omitted). This concern is absent when 

Congress has in fact acted. The gulf between these two domains 

of law makes it difficult to extrapolate from one to the other. 

The Janus Court gave no indication that it intended to curtail 

the government’s criminal enforcement, nor did the opinion 

suggest that it even contemplated the issue. Explicit 

congressional prohibitions simply operate in a different 

universe than the one inhabited by Janus. 

Indeed, the Court has noted on many occasions that 

“Congress intended securities legislation enacted for the 

purpose of avoiding frauds to be construed ‘not technically and 
15

restrictively, but flexibly to effectuate its remedial 

purposes.’” Affiliated Ute Citizens of Utah v. United States, 

406 U.S. 128, 151 (1972) (quoting SEC v. Capital Gains Research 

Bureau, Inc., 375 U.S. 180, 195 (1963)). Prousalis himself has 

offered no reason to believe that the concerns attendant upon 

implied rights of action -- concerns of legitimacy, 

institutional competence, and judicial policymaking -- are 

implicated by prosecutions such as the one at issue here. All of 

the statutes to which Prousalis pled guilty fall within the 

acknowledged powers of Congress. Petitioner has made no 

contention that the prohibitions to which he pled guilty are in 

any way unconstitutional or otherwise illegitimate. Furthermore, 

Prousalis’s conduct falls within the heartland of congressional 

concern: he orchestrated a sophisticated scheme to defraud both 

his own client and Busybox investors in the securities markets 

out of hundreds of thousands (if not millions) of dollars for 

his personal gain. It is hard to imagine a scenario more germane 

to Congress’s intentions in enacting the securities laws. 

Prousalis has simply failed to proffer any compelling reason for 

placing his conduct outside the reach of the criminal law.

In sum, to broaden Janus’s holding beyond the domain of 

implied rights would represent a stark assertion of judicial 

will, the very thing against which Janus itself inveighed. The 

majority in Janus gave not the slightest indication that its 
16

holding applied beyond the implied civil context: the four 

dissenters resisted taking the law even that far. As counsel for 

petitioner candidly noted at oral argument, no other appellate 

court has adopted Prousalis’s argument; indeed, counsel was 

unable to identify a single district court that had applied 

Janus in the criminal context. There is a good reason for this 

dearth of cases. It is not the role of courts to blaze new 

trails into uncharted territory in the absence of any clear 

textual or precedential mandate for doing so. Considerations of 

judicial restraint and modesty militate against such an 

untethered venture. In the absence of more affirmative 

indications from either Congress or the Supreme Court, we 

decline to work such an avulsive change in law on our own. 

III.

For the foregoing reasons, we reject Prousalis’s arguments 

and affirm the dismissal of his petition.

AFFIRMED
17

TRAXLER, Chief Judge, concurring in the result:

“Under Rule 10b-5, it is unlawful for ‘any person, directly 

or indirectly, . . . [t]o make any untrue statement of a 

material fact’ in connection with the purchase or sale of 

securities.” Janus Capital Group, Inc. v. First Derivative 

Traders, 131 S. Ct. 2296, 2301 (2011) (quoting 17 C.F.R. 

§ 240.10b-5(b)) (alterations in original). The Supreme Court in 

Janus held that “[f]or purposes of Rule 10b-5, the maker of a 

statement is the person or entity with ultimate authority over 

the statement, including its content and whether and how to 

communicate it.” Id. at 2302. Although I believe “make” has 

the same meaning in the criminal context as it does in the 

context of a private right of action, I nevertheless would 

affirm.

Prousalis argues that the conduct underlying his 

convictions is no longer illegal because Janus demonstrates that 

it was Busybox, and not he, who made the statements that were 

the basis for his convictions. However, that it was Busybox 

that made the statements does not negate the illegality of 

Prousalis’s causing Busybox to make them. Subsection 2(b) of 

Title 18 states that “[w]hoever willfully causes an act to be 

done which if directly performed by him or another would be an 

offense against the United States, is punishable as a 

principal.” That provision “is intended to impose criminal 
18

liability on one who causes an intermediary to commit a criminal 

act, even though the intermediary who performed the act has no 

criminal intent and hence is innocent of the substantive crime 

charged.” United States v. Richeson, 825 F.2d 17, 20 (4th Cir. 

1987) (internal quotation marks omitted). Subsection 2(b) “does 

not set forth an essential element of the offense with which the 

defendant is charged or itself create a separate offense.” 

United States v. Ashley, 606 F.3d 135, 143 (4th Cir. 2010). 

Thus, a defendant can be liable under § 2(b) regardless of 

whether the indictment even charges that provision.1 See id. 

Prousalis’s willful intent to defraud, combined with 

Busybox’s duty not to make the charged material 

misrepresentations and omissions, made it a crime for Prousalis 

to cause Busybox to make the statements at issue. Thus, his 

contention that the conduct underlying his convictions is no 

longer illegal after Janus is simply incorrect, and the district 

court properly dismissed his petition.2

 1 The indictment did expressly charge 18 U.S.C. § 2 with 

regard to Counts Two and Three. 

2 Count One alleged a conspiracy, the objective of which 

was to commit securities fraud, wire fraud, and mail fraud. 

Even if under Janus the alleged conduct did not amount to 

conspiracy to commit securities fraud, it still amounted to 

conspiracy to commit wire fraud and mail fraud, and this 

provides an additional basis for affirmance concerning Count 

One.