1 (Slip Opin i o n) OCTOBER T ERM, 20 10
Sy llabu s

N O TE : Wh er e it i s feas ibl e , a s y llab u s (h ead n ot e) wil lbe rel e as ed , as is bein g d o n e incon n ecti onwithth is cas e , a tth e ti meth e op in i o n is is s u ed

. Th e s y ll abu s con s titu tes n o p a r t of th e op in i o nof th eC o u r t bu t h a s be en pre p are dbyt h e Re po rte ro f De ci sio n s fo r t h e co nveni e nce of t h e reade r

. Se e United Statesv. Detroit Timbe r& Lumb er Co., 200U. S

. 3 21, 337

. 

# SUPREME CO URT O F THE UNI TED STATES

Sy llabu s 

### JANUS CAPITAL GROUP, INC., ET AL



### . v . FIRST DERIV ATI VE TRADE R S

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 09–5 25. Ar g u ed Dec e mb er7, 2010— Dec i ded Ju n e 13, 201 1
R e s p ondentFirs tDeriva t i ve Tra d ers (Firs tDeriva t i ve), repres ent i ng a

class of stock h olders in petitionerJanus Capit a l Group, Inc. (JCG), filed thi s private action under Se curit i es a n d Excha n geCom m is sion (SEC) Ru le 1 0 b–5, wh ic hforbids “ a n yper s on

. . . [t]o make an yun
tr ue state m ent of a m a ter i alfac t” in c o nnec t ion with the pur c h ase or sale of securiti es. The complaint al leged, inter alia
, th at JCG an d it s wholly owned subsid iary, petition er J a nus Ca pita l Ma nagement LLC (JCM), made false stateme n ts in mu tualfund prospectuses fi led by J a nus Inves t ment Fund—for which J C Mwa s the inves tment advis e r and adminis t r a tor

— and tha tthose st ate m ents affecte dthe priceof JCG’ s stoc k. Alth ou ghJCG c r e ated Jan u s In v e stmen t Fu n d , it is a separ a te leg a lentityowned entir e lyb ym u t u a lf u n di n v e s t o r s

. T h e Dis t rictCourtdis m is s e d t h e com p la intfor fa ilure t o st a t e acla i m. The Fourt hCi rcuitre vers ed, holding t h a tFirs tDeriva t i ve ha d s u ffi

c i en tlyalleg e d th atJ C G a n d JCM , by p a rticipat ing in the writing and disse mination of the prospect uses, made the misleading state

ments c o ntained in the documents. Befor e this Cour t, Fir s t Der i v a
tiv e c o ntinues to ar g u e that JCMmade t h e state m ents but seeks to h o ld JCG liabl e on lyas a c o ntr o l per s onof JCMu n d er§2 0(a). Held: Because the fal s e statements incl uded in the prospectuses were

made byJan u s In v e stmen t Fu n d , n o t byJCM , JCMan d JCG c a n n o t be h e ld liable i na pr iv ate ac tionu n d erRu l e 10b– 5. Pp. 5–12.

(a) Alth ou gh n e ith e rRu le 10b –5 n o rth e statu t e it i n ter p r e ts, §10(b) of the Act, expressly creates a private right of ac tion, such an “action is i m p lied under §10(b).” Superinten de nt of In s. of N. Y. v. Bank ers Life & Casualty Co. , 404 U. S. 6 , 13, n

. 9. Th at h o ldin g“r e
mains the la w,” Stoneri dge Inves t m e nt Partne rs, LLC v. Scientific

-2 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS

Sy llabu s Atlanta, In c. , 552 U. S. 14 8, 16 5, bu t, ina n aly z in gth e qu estionatis

sue, the Cour t is mindful th at i tmus tg i v e “nar r o w dime nsions .

. . to
a r i gh t .

. . Cong r e ss did not author ize when it fir s t ena c ted the sta t

ute and did no t expand whe nit revisited” it , id., at 167. Pp. 5–10. (1) ForRu le 10b– 5 pu r p oses, th e makerof a sta t emen t is th e per s on orentitywith ultim a te au thority over the state m ent, includ

ing its conten t a n d whethe r a n d ho w to c o mmunic a te it. Without

c o n t r o l , ap e r s o no re n t i t yc a nm e r e l ys u g g e s tw h a tt o s a y , n o t “make” a st at ement in its o w n r i gh t. Thi s rule follows from Central Bankof Denv er, N. A. v. Fi rst In ters tat e Bankof Denv er, N. A. , 5 11 U. S. 164, 1 8 0 , wh ichh e ld th at Ru le 10 b– 5’ s pr iv ate r i gh t of ac tion does notinclude s u it s a g ains ta i ders and ab e t t o rs who cont rib u t e “subs t anti al a ssi stanc e ” to t h e makingof a sta t ement b u t do not ac

tuallymake it

. Reading“m ake” mor e br oadly , to inc l ude per s ons o r entities l a c k ingultimate c o ntr o l ov era state m ent, would subst a n
tia l ly undermine Central Bankbyr e n d er in gaider s an dabe ttor s al

mostnonex i stent. The Co ur t’ s inte r p r e tation i s also su g g e sted by Stoneri dge, 552 U. S., at 161 , an d ac c o r d s withth e n a rr ow sc ope th at must be g i v e n the implied pr iv ate r i gh t of a c tion, id., at 167. Pp. 6–8. (2) The Cour t r ejec t s the Gov e r n ment’ s contention tha t“ m ake ” sh ou ld be defi n e d as “c r e ate , ” th er ebyallowin gpr iv ate plain t iff s t o
sue a person who provides the fal s e or mislead i ng informationthat

an oth e rper s onpu ts in to a s t ate m en t. Adopting that definition would be inconsistent with Stoneri d ge, supra , at 161, wh ic hr e jec t ed a pr i

v a te Ru le 1 0 b –5 su i tag ain s t c o mpan ies i n v o lv ed indeceptiv e tr an s
actions, even when info rmation abo ut those tr ansac t io ns was l a ter inc o r p or ated i n to false publi cstatements. Fir s t Der i v a tiv e notes the uniquely close relationship betweena m u tu al fu n dan d it s in v e st

m e nta dvis e r, b u tt h e corpora t e form alit ies were ob s e rved, a n d rea p
portionment of liabi lity in li ght of th is close relationshi p is properly th e r e spon sibi lityof Con g r e ss, n o t t h e court s

. Furt he rm ore, Firs t Der i v a tiv e ’ s r u le wou l d r e ad in to Ru le 1 0b– 5 ath eor yof li abil i ty simi lar to—but broader than—control -personliabil i tyu n d er§20(a). Pp. 8–10.

(b ) Al t h ough J C M m a y have b een s i gnifica n t l y involved i nprepa r
ing the prospe ctuses, it did not itse lf “make” the state m ents at i ssu e forRu le 10b– 5 pu r p oses. Its a ssi stan c e inc r a ftin gwh at was s a id

was su bjec t to Jan u s In v e stmen tFu n d ’ s ultim a te c o n t r o l. Pp. 10–12. 566 F. 3d 11 1, r e v e r s ed.

T HOMAS , J., d e livered the opinion of the Court, in whi c h R OBERTS , C. J., and S CALI A , K ENNEDY , an d ALITO , JJ., joined. B RE YER , J., filed a dissenting opi n ion, in which G IN SB U R G , S OTOMAYOR , an d K AGAN , JJ., join ed._________________

_________________ 1 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt

NOTIC E : Th is op i n ionis subjec t to f o rma lrevi si onbef o r e publicat ioninth e p r eli m in ary p r in t of th e U n it edS t at es R e p o rts

. R e ad ers ar e r e qu es ted to
n o tif yth e R e p o r t e rof D e c i s i on s , Su p r em e C o u r t of th e U n ited St at es , Wa s h

ington, D. C. 2054 3, of any typ o gra p hical or other f o rmal err o rs , in or der th atc o rr ect i on sm a y b e mad eb e f o r e th ep r e lim in aryp r in t go es t o p r es s

. 

# SUPREME CO URT O F THE UNI TED STATES

No. 09–5 25


### JANUS CAPITAL GROUP, INC., ET AL 

### ., PETITIONERS

v. FIRST DERIVATIVE TRADERS

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FOURTH CIRCUIT [Ju n e 13, 2011 ]


### J USTICE 

### T HOMA S 

### delivered the opinion of the C o urt. This case r e quires us to determine whether Janus Capi

tal Management LLC (JCM), a mutual fund investment adviser, can be h e ld liable ina pr ivate action under Secu

rities and Exchan ge Commission (SEC) Rule 10b–5 for false statements included in its client mutual funds’ pro

spectuses. Rule 10b–5 prohibits “mak[in g] any untru e statement of a material fact” in connection with the pur

chase or sale of s e curities. 17 CFR §240.10b–5 (2010). We conclude that JCM cannot be held liable becau s e it did no t mak e the statements inthe prospectuses. I Janus Capital Group, Inc. (JCG), is apublicly trade d company th at created the Janus family of mutual funds. These mutual funds are organized in a Massachusetts business trust, the Janus Investment Fund. Janus In

vestment Fund retained JCG’s wholly owned subsidiary, JCM, to be its investment adviser and administrator. JCG and JCM are the petitioners here. Although JCG created Janus Inv e stment Fund, Janus Investment Fund is a separate legal entity owned entirely2 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### by mutual fund investors. Janus Investment Fund has no assets apart from tho s e owned by the investors. JCM provides Ja nus Investment Fund with inves t ment advi

sory service s , which include “the m anagement and admin

istrative services necessary for the operation of [Janus] Fun[d],” App. 225a, b u t the two entities maintain legal independence. At all times re lev ant to this case, all of the officers of Janus Investment Fund were also officers of JCM, but o n ly one member of Janus Investment Fund’s board of trustees was associated with JCM. This is more independen ce than is required: By statute, up to 60 per

cent of the board of amutual fu nd may be composed of “interested persons.” See 54 Sta t . 806, as amended, 15 U. S. C. §80a–10(a); s ee als o 15 U. S. C. A. §80a–2(a)(19) (2009 ed. and Feb. 2011 Supp.) (defining “interested person”). As the securities laws require, Ja nus Investment Fund issued pros pectuses describi ng the investment strategy and operations of its mutual funds to investors. See 15 U. S. C. §§77b(a)(10), 77e(b)(2), 80a–8(b), 80a–2(a)(31), 80a–29(a)–(b). The prospectuses for several funds repre

sented that the funds were not su itable for m a rket timing and can be read to su ggest tha t JCM would implement policies to curb the p r actice. 1 

### For example, the Janus

——————

1 M a r k et timingis a tr ading str a tegythat ex ploits time delayin mu

tual funds’ d a ily valuation system

. The price fo r b u ying or selling sh ar es of a m u tu al fu n dis or din a r ilydeter m ined bythe nex tnet ass e t value (NAV) calculation afte r the orde r is placed. The NAV calcula t io n
us ua lly ha ppens once ada y , a tthe cl ose of the major U. S. markets. Beca us e of ce rt a i n t i m e dela ys , ho weve r, the values used in these

c a lc ulations d o not a l way s ac c u r a telyr e flec t the tr u e v a lue of th e underlying assets. For example, a f und may value it s foreign securities based on the price at the cl ose of the for e ig n mar k et, whic h may have

oc c u r r e d sev e ral hour s before the c a lc ulation. But ev ents migh t hav e taken place after the close o f the forei g n market that could be expect ed to affect their price. If the e v ent were e x pected to increase the price of t h e foreig n s e curit i es , am a rket -t im in g inves t or could b u y s h a r es of a3 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt 

### Mercury Fu nd prospectus dated February 25, 2002, stated that the fund was “n ot intended for market timing or excessive trading” and represen ted that it “ma yreject any purchase re quest .

. . if it believes that any co mbination of trading activity is attributabl e to mark et timing or i s otherwise excessive or potentially disruptive t o the Fund.” App. 141a. Although market ti ming is legal, it harms other investors in the m u tual fund. In September 2003, the Attorney General of th e State of New York fi led a compl a int ag ainst JCG and JCM alleging that JCG entered into secre t arrangements to permit market timing in several funds run by JCM

. After th e complaint’s allegations became public, investors withdre w significant amounts of money fro m the Janu s Investment Fund mutu al funds. 2 

### Because Janus Investment Fund compensated JCM based on the total value of the funds and JCM’s management fees comprised a significant percentage of JCG’s income, Janus Investment Fund’s loss of value aff e cted JCG’s value as well. JCG’s stock price fell n e arly 25 percent, from $17. 68 on September 2 to $13.50 on September 26. Respondent First Derivative Traders (First Derivative ) represents a class of pl aintiffs who owned JCG stockas of September 3, 2003. Its complaint asserts claims against JCG and J C M for violations of Rule 10b–5 and §10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 1 5 U. S. C. §78j(b). First Derivative alleges that JCG and JCM “caused mutual f und prospectuses to b e issued for Janus mutual funds and made them available to

—————— mutual fund a tthe ar tific i al l ylow NAV an d sellthe next day when the NAV correct s it s e lf upwa rd. S ee Dis c los u re Rega rding Ma rketTim i ng and Selective Disclosure of Port folio Holdings, 68 F e d. Reg. 7040 2 (pr o posed Dec

. 17, 200 3).

2 In2004, JCG an d J C Mset t led th e s e a lle g a tion s an da g r eed to r e
duce their fees by$12 5 mil lion and pay$50 m illion inciv il penalties and $50 mi llio n in disg org e ment tothe mutual fund investors.4 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### the investing public, which created the misleading impres

sion that [JCG and J C M] would implement measures to curb marke ttiming in the Janus [mutual funds].” App. to Pet. for Cert. 60a. “Had the truth been known, Jan us [mutual funds] wouldhave been less attrac t ive to inves

tors, and consequently, [JCG] would have realized low e r revenues, so [JCG’s] s t ock would have traded at lower prices.” Id. , at 72a. First Deriv a tive contends that J C G and JC M “materi

ally misled the investing public” and that class members relied “upon the integ r ity of the market pr ice of [JCG] securities and mar k et information relating to [JCG an d JCM].” Id. , at 109a. The complaint also alleges that JCG should be h e ld liable for the acts o f JCM as a “controlling person” un der 15 U. S. C. A. §78t(a) (Feb. 2011 Supp.) (§20(a) of the Act). The Distric tCourt dis m issed the complaint for failure to state a claim. 3 

### In re Mutual Fu nds Inv. Litiga tion , 487 F. Supp. 2d 618, 620 (D Md. 2007 ). The Court of Appea l s for the Fourth Circuit reversed , holding that First Deriv a
tive had su fficiently alleged that “JCG and J C M, by par
ticipating in the writing and dissemination of the prospec

tuses, madethe misleading statements contained in th e documents.” In re Mu tual Funds I n v. Litigation , 566 F. 3d 111, 121 (2009) (emphasis in original). With respect to the element of reliance, the court found that investors would infer that JCM “playe d a role inpreparing or approving the contentof the Jan us fund pr ospectuses,” id. , at 127 , but that investors would not infer the same about JCG,

——————

3 Th e elemen ts of a pr iv ate ac tionu n d erRule 10 b–5 ar e “ ( 1) a ma te

rial mi srepresentation or o m ission byth e defendant; ( 2 ) scienter; (3) a
conne ction between the misrepresentatio n or omissionand the pur

cha s e or s a le of as e curit y ; (4) re liance up on the misrep resentation or omission; (5) economic loss; and (6) loss causation.” Stoneri dge Inv est

ment Part ners, LLC v. Scientifi c-Atla nt a, Inc. , 552 U. S. 148, 15 7 (200 8).5 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt 

### which could be liable only as a “control person” of JCM under §20(a). Id. , at 12 8, 129–130. II We granted certiorari to address whether JCM can b e held liable in a private action under Rule 10 b–5 for false statements included in Janus Investment Fund’s pro

spectuses. 561 U. S. ___ (2010). Under Rule 10b–5, it is unlawful for “any pers on, directly or indirectly, .

. . [t]o make any untrue stat ement of a material fact” in connec
tion with t h e purchas e or sale of securities. 17 CF R §240.10b–5(b). 4

### To be liable, ther efore, JCM must have “made” the material misstatements in the prospectuses. We hold th at it did not. 5 

### A The SEC promulgated Rule 10b–5 pursuant to authority granted un der §10(b) of the Securities Exch ange Act o f 1934, 15 U. S. C. §78j(b). Although neither Rule 10b–5 nor §10(b) expressly c r eates a private right o f action, this Court has held that “a private ri ght of action is implied under §10(b).” Superi ntenden tof Ins. of N. Y. v. B a nkers Life & Casualty Co. , 404 U. S. 6, 13, n. 9 (1971). Tha t holding “remains the law,” St oner idgeInvest me ntPart

-

——————

4 Rule 1 0 b

– 5 ma kes it “ unla w ful for a n y pers on, direct ly or indirect ly, by the use of any means or instrume ntalit yof inter s ta te c o mmer c e , or of the mails or of any facili ty of an y national securities exchange,

. . . [t]o make any untrue state m ent of a ma terial fact or to omit to state a
m a t e rial fa ct neces s a ry in o r der t omake the state m ent s made, in the light of the circumstances under whic h theywer e made, not mis l eadin g

. . . .” 17 CFR §240.1 0 b –5(b).

5 Al t h ough Fir s tDeriva t i ve a r gued b e low t h a tJ C G viola t ed R u le 10b –5 bymak i n gth e state m en ts in the prospectuses, it now seeks to h o ld JCG li ab le solely as a c o n t r o l per s on of JCMu n d er§20(a). Th e only questionwe must answer, th erefo r e , is whether JCM made th e miss ta tements

. WhetherFi r s t Der i v a tiv e has stated ac l aim ag ains t JCG as a c o n t r o l per s ondepen d s onwheth e rit h a s s t ated a c l a i m ag ain s t JCM

.6 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### ners, L L C v. Sci e ntifi c-Atlan t a, I n c. , 552 U. S. 148, 165 (2008), but “[c]oncerns with the judicial creati o n of a pri

vate cause of action ca ution again s t its expansion,” ibid. Thus, in a nalyzing whether JCM “made” the statements for purposes of Rule 10b–5, we are mindful that we mus t give “narrow dimensions .

. . to a right of a cti on Congress did not authorize when it first enacted the s t atute and did not expand when it revisited the law.” Id., at 167.
1 One “mak es” a statement by stating it. When “mak e” is paired witha noun expressingth e action of a verb, th e resulting phrase is “approximately equivalent in sense” to that verb. 6 Oxford English Dictionary 66 (def. 59) (193 3 ) (hereinafter OED); accord, Webster’s New International Dictionary 1485 (def. 4 3 ) (2d ed. 1 934) (“Makefollowed by a noun with the indefinite article is often nearly equiva

lent to the verb intran s itive corre sponding to thatnoun” ). For instance, “to mak e a proclamation” is the a p proximate equivalent of “to proclaim,” and “to make a promise” ap

proximates “to promise.” See 6 OED 66 (def. 59). The phrase at i ssue in Rule 10b–5, “[t]o make an y .

. . sta t e
ment,” is thus the approximate eq uivalent of “to state.” For purpos es of Rule 1 0b–5, the maker of a statement is the person or entity with ultimate authority over th e statement, including its content and whether and how to communicate it. Without contro l, a person or entity ca n merely suggest what to say, not “make” a sta t ement in its own right. One who prepares or publishes a s t atement on behalf of a n other is n o t its maker. And in the ordinary case, attribution within a statement or implicit from sur

rounding circumstance s is strong evidence that a state

ment was made by—and only by—the party to whom it is attributed. This rule might best be exemplified by the relationship between a speechwri ter and a s p eaker. Ev en when a speechwriter d r afts a speech, the content is en

-7 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt 

### tirely within the control of th epers on who del iv ers it. And it is the sp eaker who takes c r edit—or blame—for wha t is ultimately said. This rule follows from Central Bank of Denver, N. A. v. Firs t Inters ta te B a nk of Denver, N. A. , 511 U. S. 164 (1994), in which we held that Rule 10b–5’s pri v ate right o f action does not includ e suits against aiders and abettors. See id. , at 180. Such suits—against entities that contrib

ute “substantial assist ance” to the making of a statement but do not actually ma ke it—may be brought by the SEC, see 15 U. S. C. A. §78t(e), but notby private parties. A broader rea d ing of “m ake,” inclu d ing perso n s or entities without ultimate control over the content of a statement, would substantially u n dermine Centr a l B a n k

. If perso n s or entities without control over the content of a statement could be c o nsidered primary violators who “made” the statement, then aiders and ab ettors would be almost nonexistent. 6 

### This interpretation is furth er sup p orted by o u r recent decision in Stonerid ge

. There, i n vestors sued “entities who, acting both as customers and suppliers, agreed to arrangements that a llowed the investors’ company to mislead its auditor a n d issue a misleading financi a l statement.” 552 U. S. , at 152–1 53. We h e ld that di s
missal of t h e complai n t was proper because the publi c

——————

6 The dis s e ntcorrect ly not e st h a t Central Bankinvolved secondary, not primary, liabi lity. Post , at 4 (op i nion of B REYER , J.). But for Cen

tral Bankt o have a n y m e a n ing, t h ere mu st be some distin c t ionb e
tween those who are prim a r ily liab l e (and thus ma yb e purs ued in private suit s) and thos e wh o a r e s e condarily liab l e (a n dthus ma y not be pursued in private suits).

We draw a cl ean line between the two—the maker is the person o r entitywith ult i mate author it yov er a st ate m en t an doth e r s ar e n o t. In contrast, the dissent’s only limitonprim ary liab ility is not much of a limitatal l. Itwould allow f o r prim ary lia bili ty wheneve r“[t]he specifi c relationships alleged

. . . warrant [tha t] conclus i on”—whatever that maymean. Po st , at 11.8 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### could not have relied on the en tities’ undisclosed deceptive acts. Id. , at 166–167. Significantly, in reaching that conclusion we emphasized that“nothing [th e defendants] did made i tnecessaryor inevita b le for [the company] to record the t r ansactions as it did.” Id. , at 161

. 7

### T h i s e m
phasis suggests the rule we adopt today: that the maker o f a statement is the entity with authority over the content of the statement and whether and how to communicate it. Without such authorit y , it is not “necessary or inevitable” that any fal s ehood will be co ntained in the statement. Our holding also accords with the narrow sco p e that we must give the implied private righ t of action. Id., at 16 7

. Although the existence of the private right is now settled, we will notexpand liability beyond the person or enti ty that ultimately has authority over a false statement.
2 The Government contends that “make” should be de

fined as “cr eate.” Brief for Unite dSta t es as Amicus Cu

riae14–15 (citing Webster’s New I n ternational Dictionary 1485 (2d ed. 1958) (defining “make ” as “[t]o ca use to exist, appear, or occur”)). This definition, although perhaps appropriate when “make” is directed at an object unasso

ciated with a verb ( e.g. , “to make achair”), fails to capture its meanin gwhen directed at an object ex pressing the action of a verb. Adopting the Government’s definition of “mak e” would also lead to results inc o nsistent with our precedent. The Government’s definition would pe rmit pri v ate plaintiffs to sue a person who “provides the false or misle a ding infor

mation thatanother pe rson then p u ts into the statement.”

——————

7 We agree that “no one in Stoneri dgecont ended that th e equipment

s u ppliers were, in fa ct , t h e m a k ers of th e c able c o mp any ’ s mis s ta t e
ments.” Post , at 8. If Stoneridgehad addressed whether the equipmen t
s u ppliers were “ m a kers ,” t o da y’s decis i on would b e un neces s a ry. T h e point is that Stoneri dge ’s analy s is su g g e st s th at th eyw e r e n o t.9 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt 

### Brief for United States as Amicu sCuriae13

. 8

### B u ti n Stonerid ge , we rejected a private Rule 10b– 5 suit against companies involved in deceptive transactions, even when informationabout those trans actions was later incorpo

rated into false public statements. 552 U. S., at 161. We see no reason to treatparticipa ting in the draftingof a false state m ent differently from engaging in deceptive transaction s, when each is merely an undisclosed act preceding the decision of an ind e pendent enti ty to mak e a public statement. For its par t , First Derivative su ggests thatthe “well

recognized and uniquely close relationship between a mutual fund and its i n vestment adviser” sh ould inform our decision. Brief for Respondent 21. It suggests that an investment adviser sh ould gener a lly be und erstood to be the “mak er” of statements by its client mutual fund, like a playwright whose lines are delivered by an actor. We decline this invitation to disrega r d the cor p orate for m

. Although First Deri vative andits amicipersuasively argue tha t investment advisers e x ercise sign ificant influ

-

——————

8 Bec a u s e we do n o t fin dth e mean in gof “make” inRu le 10b– 5 to be ambiguous, we need not co nsider th e Go vernm e nt ’s a s s e rt ion t h a twe should defert o the S EC’ s i n ter p r e tati on of the word el sewhere. Brief for United States as Am icus Curiae13 (citing Brief fo r S EC as Am icus Curiaein Pacific Inv

. Mgm t . Co. LLC v. Mayer Brown LLP, No. 09– 161 9 (CA 2 ), p. 7); see Christ ens e nv. Ha rri s County , 529 U. S. 576, 58 8 (2000). We note, howeve r, that we have previous ly ex pres s e d s k epti

cism over the degree to which the S EC s h ould receive def e rence rega rd

ing theprivate rightof action. See Piper v. Chri s-Craft I ndu stri es, In c. , 430 U. S. 1, 4 1 , n

. 27 (19 77) (n otin gth at t h e SEC’ s pr es u m ed ex per t is e “is of lim ited value” when analyzing “whe ther a cause o f action shoul d be impl ied byju dic i al in ter p r e tationinfav o rof a par t ic u l arc l ass o f litig ants ”). This al so is not t h e fir s t time t h is Cour t has disag r eed wit h th e SE C’ s br o a d v i ew of § 1 0 (b) orRu le 10 b–5. See, e.g. , Central Bank of Denv er, N. A. v. First In ters t ate Bankof Denv er, N. A. , 51 1 U. S. 164 , 188–1 91 ( 1 9 9 4 ) ; Dirks v. SEC, 46 3 U. S. 6 46, 6 66, n

. 2 7 (198 3); Ernst & Ernstv. Hochfelder , 425 U. S. 185, 207 ( 197 6); Blue Chip Stamps v. Manor Dr ug S t ores , 421 U. S. 723, 746, n

. 10 (197 5).10 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### ence over their client funds, see Jo n e sv. Har r is As socia t es L. P. , 559 U. S. ___, ___ (2010) (s lip op., at 1–2), it is u n
disputed that the corporate formalities w e re observ e d here. JCM and Janus Investment Fund re main legally separate entities, and Janus Investment Fun d ’s board of trustees was more independent than the statute requires. 15 U. S. C. §80a–10. 9

### Any reappo rtionment of liability i n the securities industry in light of the close relationship between investment advisers and mutual funds is proper ly the respons ibility of C o ngress and not the courts. More

over, just as with the Govern ment’s theory, First Deriv a
tive’s rule would create the broad liability tha twe rejecte d in Stonerid ge

. Congress also has est ablished li ability in §20(a) for “[e]very pe rson who, directly or indirectly, controls any person liable” for violations of the securities laws. 15 U. S. C. A. §78t(a). First Derivat i ve’s theory of liability based on a relationshi p of influence resemble s the liabili ty imposed by Congress for contro l. To adopt First Deriv a
tive’s theory would rea dinto Rule 10b–5 a theory of liabil

ity similar to—but broader in application than, see post , at 9—what Congress has already created expressly else

where. 10 

### We decline to do so. B Under this rule, JCM did not “make” any of the state

-

——————

9 Nor does Firs tDeriva t i ve cont end t h a ta n y s t a t em ent s ma de b y JCMto Janus Inv e stmentFund wer e “publicst ate m ents” forthe purposes of Basic Inc

. v. Levinson , 485 U. S. 224, 2 27– 2 28 (1 988). W e do not address whether and in whatcircum s t a nces s t atements woul d qualify as “pu b lic.” Cf. post , at 12 –13 (cit i n gcases inv o lv ingliabilityfor sta t ements m a de to ana l y s ts); In re A e tn a, Inc. Secu ri ties Liti gation , 617 F. 3d 27 2 , 275–2 77 (C A3 20 10) (in v olv i n galleg a tion s th at defen

dants “publ i cly tout[ed]” fals ities on analys t confere n ce calls).

10 We do not address whether Cong r e ss cr eated lia bili tyforentities tha ta c t through in nocent in termedia ries i n15 U. S. C. A. §78t(b). Se e Tr. of Oral Ar g. 6, 61.11 Cite as: 56 4 U

. S. ____ (2011)
Opinion of theCourt 

### ments in th e Janus Investment Fund prospectuses; Janus Investment Fund did. Only Janus Investment Fund—n ot JCM—bears the statutory obligation to file the prospec

tuses with the SEC. 15 U. S. C. §§77e(b)(2 ), 80a–8(b), 80a–29(a)–(b); see als o 17 CFR §230.497 (imposing re

quirements on “investment companies”). The SEC ha s recorded th at Janus I n vestment Fund filed the prospec

tuses. See JIF Group1 Standalone Prospectuses (Feb. 25 , 2002), online at http://www.sec .gov/Archive s/edgar/data/ 2777 51 / 00 0027 77 510 2000 04 9 / 0 0002 77 751

- 02-0 0 0 049 .t xt (as visited June 10, 20 11, and available in Clerk of Court’s case file) (recording the “Filer” of the Janus Mercury Fu nd prospectus as “Janus Investment Fund”). There is n o allegation t hat JCM in fact filed the prospectuses and falsely attributed them to Janus Investment Fund. Nor did anythin g on the fac e of the prospectuses indicate tha t any statem ents therein came from JCM rather than Janus Investment Fund—a l e gally independent entity wi th it s own board of trustees. 11

——————

11 Fir s t Der i v a tiv e sug g e sts that “ i ndir ec tly” in Rule 10b –5 may br oaden the meaningof “make.” We di sagree. The phrase “directl y or indirectly” is set off by it se lf in Ru le 10b –5 an d mod i fi es n o t ju st “to make,” but al so “to employ” and “to engage.” We thi n k the p h rase merely clarifies that a s long as a s t atemen t is made, it d oes not matter whet her t h e s t a t em entwa s com m unica t e d direct ly or indirect ly t o t h e recipient. A different unde r s t a n ding of “indirectly” would, like a broad definition of “make,” thr e at en to erase the line between primary viola

tor s an d aider s an d abet t or s estab lish e d b y Central Bank

.

In this c a se, we need not define pr ec isely what it means to c o mmuni

ca t e a“m a d e” s t at em ent indirect ly because none of the statements i n the prospectuses were attributed, ex plicitly or implicitly, to JCM. Wi thou t a t trib uti o n, ther e i sno indi c a ti on tha t Janu sInv e s t m e nt Fun d

wa s quo ting o rotherwi s e re pe at ing a s t a t emen t origin a lly “ m a d e” by JCM

. C f

. Anixter v. Home-St ake Product i onCo. , 7 7F. 3d 1 2 15, 12 2 0 , an d

n. 4(CA101996) (quoti ng a s i gned “ ‘Auditor ’sRepor t ’ ” incl uded in a pro
sp ec tu s); Basic , supra , at 22 7, n

. 4 (qu o t i n g a newsitemreporting ast at e
men t byB a sic ’ s pr es id en t)

. M o r em ay be r e qu ir ed tofin dth at a per s o n
orent i tym a d ea st a t e m en t i n dir e c tly , bu t at tr ibu t ion i s nec e s s ary

.12 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS Opinion of theCourt 

### First Derivative sugge sts that both JCM a n d Janus Investment Fund might have “made” the misleading statements within the meaningof Rule 1 0b–5 becau s e JCM was s i gnificantly involved i npreparing the prospe c
tuses. But this assista n ce, s ubject to the ultimate control of Janus Investment Fund, does not mean that JCM “made” any statements in the prospectuses. Althou gh JCM, like a speechwriter, may h a ve assisted Janus In

vestment Fund withcrafting what Janus Investment Fund said i nthe p r ospectuses, JC M itself didnot “ma k e” those statements for purposes of Rule 10b–5. 12 

### * * * The statements in the Janus Investment Fun dprospec
tuses were made by Janus Investment Fund, not by JCM. Accordin gly , First Derivative ha s not stat ed a claim against JCM under Rule 10b–5. The judgment of the United Sta t es Court of Appeals for the Fourth Circuit i s reversed. It is so orde red.

——————

12 Tha tJ C M pr ovided a cces s to J a nus Inv e s tment Fund’s pros pec
tu ses onits Web site is a l so n o t a basi s forliabil i ty

. M e r e lyh o stin g a doc u ment on aWeb si te doe s not indic a te t h at the hos t in gentityadop t s the document as i t s own statement or exercises control over its content. Cf. United Sta t esv. Wa re , 57 7 F. 3d 442, 4 48 (CA 2 20 09) (in v olv i ngth e is s u a n ce of fa ls e pres s releas es t h rough in nocentcom p a n ies )

. In doin g
s o , we do not think JCM made any of the statements in Janus Invest

ment Fund’s pros pectus es for purpos es of Ru le 10b –5 l i abil i ty , ju st a s we do not thi n k that the S EC “ m ak es” the state m ents in the many prospectuses available on its Web site._________________

_________________ 1 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

# SUPREME CO URT O F THE UNI TED STATES

No. 09–5 25


### JANUS CAPITAL GROUP, INC., ET AL 

### ., PETITIONERS

v. FIRST DERIVATIVE TRADERS

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FOURTH CIRCUIT [Ju n e 13, 2011 ]


### J USTICE 

### B REYER 

### , wi th whom J U S TI CE 

### G INSBUR G 

### , J USTICE 

### S OTOMAYOR 

### , a n d J USTIC E 

### K AGAN

### join, dissenting. This case involves a private Securities and Exchange Commission (SEC) Ru le 10b–5 action brought by agrou p of investors against Janus Capital Group, Inc., and Janu s Capital Ma nagement LLC (Janu s Management), a firm that acted as an investment advis e r to a family of mutual funds (collectively, the Janus Fun dor Fund). The inves

tors claim that Janus Management knowingl y made materially false or misl ea ding st atements that appeared in prospectuses issued by the Janus Fund. Th ey say tha t they relied upon those statements, and that they suffered resulting economic harm. Janus Man a gement and the Ja nus Fund are closelyrelated. Each of the Fund’s officers is a Janus Management employee. Janus Management, acting through those employees (and other of its employees), manages the purchase, sale, redemption, and distribution of the Fund’s investments. Janus M anagement prepares, modifies, and implements the Janus Fund’s long-term stra tegies. And Janus Management, acting th rough those employees, carries out the Fund’s daily activit i es. Rule 10b–5 says in relevant part that it is unlawful fo r “any person , directlyorindirectly .

. . [t]o makeany untrue statement of a material fact” in connection with the pur

­2 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### chase or sa le of securities. 17 C F R §240.10b–5(b) (201 0) (emphasis added). See also 1 5 U. S. C. §78j(b) (§10(b) of the Securities Exchan ge Act of 1 934). The specific legal question b e fore us is whether Janus Management can be held respon sible under the Rule f o r having “ma[d]e” certain false s t atements about the Janus Fund’s activitie s

. The statements in question appea rin the Ja nus Fund’s prospectuses. The Court holds that only the Janus Fund, not Janus Management, could h a ve “ma[d]e ” those statements. The majority po ints out that the Janus Fund’s board of trustees has “ultimate a u thority” over the content of the statements in a Fund prospectus. And in the majority’s view, only “the person or entity with ultimate authority over the statement, including its content and whether and how to com m unicate it” can “make ” a stateme n t within th e terms of Rule 10b–5. An te , at 6. In my view, however, t h e majorityhas incorre ctly interpreted the Rule’s word“make.” N e ither common English nor this Court’s earlier cases limit the scope of that word to tho s e with “ult imate authority” over a statement’s content. To the contrary, both language and case la w indicate th at, depending upon th e circumsta n ces, a management co mpany, aboard of trustees, individual compa n y officers, or others, separatelyor together, might “make ” statements contained in a firm’s prospectu s—even if a board of directors has ultima te content-related responsibility. And the circumstances here are such that a court could find that Janus Management made th e statements in question. I Respondent’s complaint sets forth the basic elements of a typical Rule 10b– 5 “fraud on the market” claim. It alleges tha tJanus Management made statements that “created t h e misleading impr ession that” it“wo u ld3 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### implement measures to curb” a trading s t r a tegy called “market timing.” Sec o nd Amended Complaint ¶6 (hereinafter Complaint), App. to Pet. for Cert. 60a. The complaint adds that Ja nus Management knew that thes e “market t i ming” statements were false; that the statements were mat e rial; that the market, in pricing securities (including relate d securities) relied upon the statements; that as a result, when the truth came out (that Janu s Management indeed permitted “marke t timing” in the Janus Fund), the price of relevant shares fell; and th e falsestatements the r eby caused respondent significant economic losses. Complaint ¶¶4–10, id. , at 60a–63a. Cf. Stone r i d ge Inves t ment Pa rtners, L L C v. Scien t ific-A tlanta, Inc. , 552 U. S. 148, 157 (2008) (identifying the elements of “ atypical §10(b) private action”). The majority finds the complaint fatally flawed , however, because (1) Rule 10b–5 says that no “person ” shall “directly or indirectly .

. . makeany untrue statement of a material fact,” (2) the statements at issue appeared in the Janus Fund’s prospectuses, and (3) only “the person or entity with ultimate authorit y over the statem ent, including its content and whether and how to communicate it” can “make” a false statement. Ante , at 2–3, 5–6. But where can the majority find legal support for the rule that it enunciates ? The English langua ge does n o t impose upon the word “make” boundaries of t h e kind the majority fi nds determ inative. E v ery day, h o sts of corp orate officials make st atements with content that more senior offic i als or the board of directors h a ve “ultimate authority” t o control. So do cabin e t officials make state

ments about matters that the Constitution places within the ultimate authority of the President. So do thousands, perhaps millions, of other employees make statements that, as to content, form, or timing, are subject to the control of another. Nothing in the English language prevents one fro m4 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### saying that several different individuals, separately or together, “make” a statement that each has a hand in producing. For example, as a ma tter of English, one ca n say that a national political party has made a statement even if the only writ ten communication consists of uniform press releases issued inthe name of local party branches; one can say that one foreign nation has made a statement even when the officials of a different nation (subject to its influence) s p eak about the matter; and one can say tha t the President has made a statement even if his pre s s officer issues a communication, sometimes in the press officer’s own name. Practical ma tters related to context, including control, participation, and relevant audience, help determine who “makes” a statement and to whom that statem ent may pr operly be “attributed,” see ante , at 11, n. 11—at least as far as ordinary English is concerned. Neither can the majority find support in any relevan t precedent. The majority says that its rule “f ollows from Central Bank of Denver, N. A. v. First In ters ta te B a nk of Denve r, N. A. , 511 U. S. 164 (199 4),” in which the Court “held that Rule 10b–5 ’s private right of action does not include suits against aiders and abettors.” An te , at 7. Bu t Central Bank concerns a different matter. An d it no more requires the majority’s rule than f r ee air travel for sma ll children requires free air travel for adults. Central Ba nkis a cas eabout secondaryliabil i ty, liability attaching, not to an i n dividual making afalse statement, but to an individual helping someone elsedo so. Central Bankinvol v ed a bon dissuer a ccused of having ma de materially false statements, which overstated the values of property that backed the bon d s. Centra l Bankalsoinvolved a defendant that was a bank, serving as indenture truste e , which was supposed to check the bond issuer’s valu ations. Th e plaintiffs claimed that the ba nk delayed its valuation checks and thereby helpedthe issuer make its fa lse statements credible. The question before5 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### the Court concerned the bank’s liability—a secondar y liability for “aiding and abetting” the bond iss u er, who (on the theory set forth) wa s primarily liable. The Court made this c l ear. The question presented was “whether private civil li ability under §10(b) extends .

. . to those who do not engage in the m a nipulative or deceptive practice , but who aid a n d abet the violation.” 511 U. S., at 167 (emphasis added). The Court wrote that “aiding and abetting liability reaches persons who do not engage in the proscrib e d activi tie sat all , but who give a degree of aid to those who do.” Id., at 176 (emph a sis added). The Court described civil law “aiding and abetting” as “ ‘know [ ing] that th e other’s conduct consti tu tes a breach of dutyand giv[ing] su bstantial assistance or encouragement to the other . . . .’ ” Id., at 18 1 (quoting Restatement (Second) of Torts §876(b) (1977); emphasis added). And it reviewed a Court of Appeals decisi on that had defined the elements o f aiding and abetting as “(1) a primary violationof §10(b); (2) recklessness by the aider and abettor as to the existence of the primary violation; a n d (3) substantial assis

tanc e gi vento th e p r i m ary violat or by the ai der and ab ettor.” 511 U. S., at 168 (emphasis added). Fa ced withth is question, t h e Court answered th at §10(b) and Rule 10b–5 do not pro v ide for this kind of “aiding and abe tting” liability in private suits. By wayof contrast, th e present c a se is about pri m ary liability—about individuals who allegedly themselves “make” materially fals e statemen ts, not about those w h o help others to do so. T h e questionis whether Janus Management is primarily liable for violating the Ac t, n o t whether it simply he lped others violate the Act. The Central Ba nkdefendant concededly did not mak e the false statements in question(other s did), while here the defendants allegedly didmak e those s t atements. And a rule (the majority’s rule) absolving those who allegedly did mak e false statements does not “fo llow from” a rule ( Cen

-6 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### tral B a nk ’s rule) abso lving those who concededly did not do so. The majority adds thatto interpret the word “make” as including those “without ultimate control over the content of a statement” would “substantially undermine” Cen t ra l Bank ’s holding. Ante , at 7. Would it? The Court in Cen

tral Bank s p ecifically wrote that i t s holding did “not mean that secondary ac tors in the securities markets are always free from liab ility under the securities Acts. Any pe rso n or en tity, including a la wyer, accountan t, or bank, who employs a manipulative device or makes a mate rial miss tatement(or omission) on which a purchaser o rseller of securities relies may be liable as a primary violator und er 10b–5, assuming all of the requiremen t s for primary liability under Rule 10b–5 are met.” 511 U. S., at 191 (some emphasis added). Thus, as far as Central Bank is concerned, depending upon the circumstances, board members, senior f i rm official s, officials tasked to develop a m a rketing document, large investors, or others (tak en toge ther or separately) al l might “ma k e” materi ally false statements subjectin g themselves to primary liability. The majority’s rule does not protect, it extend s , Cen t r a l Bank ’s hol d ing of no

liability int o new territory that Central Bank explicitl y placed outside that holding. And by ignoring the language in which Ce nt ral B a nk did so, the majority’s rule itself undermines Centra l Ba nk

. Wh ere is the legal support for the majority’s “d raw[in g] a clean line,” ante , at 7, n. 6, tha t so seriouslyconflicts with Cen t r a l Bank? Indeed, where is the legal support for th e majori ty’s suggestion that plaintiffs must show some kind of “attribution” of a statement to a defendant, ante , at 11, n. 11—if it means plaintiffs must show, not onlythat the defendant “ma[d]e” the statement, but something more?7 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### The majority also refers to Stoneridge, but that cas e offers it no help. In Stonerid ge , firms that supplied electronic equipment to a cable television company ag reed with the ca ble television companyto enter into a series of fraudulent sales and p u rchases, for example, a sale at a n unusually high price, thereby pro v iding funds which th e suppliers would use to buy advertising from the cable television company. These arra ngements enabled the cable televi sion comp any to fool its accou n tants (and ultimately the public) into believing tha ti thad more revenue (for example, advertisi ng revenue) than it really had. As pa rt of the a g reement, the companies exchange d letters and backdatedcontracts to conceal the fraud. Investors s ubsequently sued the cable television compa n y,
some of it s officers, its auditors, and the equipmen t suppliers, as well, claiming that all of them had engaged in a scheme to defraud securities purchasers. In respect t o most of the defendants, investors identified allegedly materially false statements contained in the ca ble television c o mpany’s financial statements or similar documents. But in respect to the equipment suppliers, investors claimed that t h e relevant deceptive conduct wa s in the letters, backd ated contr a cts, and related oral conversations about t h e scheme. The investors argued that the equipment suppliers, “by particip a ting in the transaction s,” violated §10(b) and Rule 10b–5. Stoneridge , 552 U. S., at 155. The Court held that the equipment suppliers could not be found liable for secu rities fraud in a private suit under §10(b). But in doing so, it did not deny that th e equipmen t suppliers h a d made the falsestatements con t ained in t h e letters, contracts, and c o nversations. See id., at 158–159. Rather, the Court saidthe issue in the case was whethe r “any decept ive statement or act respondents made was not actionable because it did not have the requisite proxim a te rela t ionto the investors’ harm.” Ibid. (emphasis added).8 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### And it held that these deceptive statements or actio n s could not provide a basis for liabilit y because the investor s could not prove sufficient relianceupon t h e particular false statements that the equipment suppliers had made. The Courtpointed out that th e equipment suppliers “had no duty to disclose; and their deceptive a cts were no t communicated to the p ublic.” Id., at 159. And the Cou r t went on to say tha t“as a result,” the inves t ors “canno t show relia nce upon any” of the equipm e n t suppliers’ actions, “except in an indirect chain that we find t oo remote for l i ability.” Ib id. The Court conclud e d, “[the equipment suppliers’] deceptive acts, which were not disclosed to the inv e sting public, are too remote to satisfy the requirement of relianc e. It was [the cable company], not [the equipment suppliers], that misled its auditor and filed fraudulent financial statements; nothing [the equipm ent suppliers] did made it necessary or inevitable for [the cable company] to record the t r ansactions as it did.” Id., at 161. Insofar as t h e equipment suppliers’ conduct was at issue, the fraudulent “arrangement

. . . tookpl ace in th e marketplac e for goods and service s , not in the investment sphere.” Id., at 166. It is difficult for me to see how Stoneridge“s upport[s]” the majorit y ’s rule. Ante , a t7

. N o o n e i n Stonerid ge disputed the making of the relevant statements, the fraudulent contracts and the like. An d no one in Stonerid ge contended t hat the equ i pment suppliers were, in fact, the makersof the cable co mpany’s misstatements. Rather, Stoneridge was concerned with whether the equipment suppliers’ separatestat ements were sufficiently disclosed in the securities marketplace so as to be t h e basis for investor reliance. They were not. But this is a different inquiry than whether statements acknowledge d to have been disclosed in the securities marketplace an d9 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### ripe for reli ance can be said to ha ve been “ma[d]e” by one or another actor. How then does Stonerid gesupport the majority’s n e w rule? The majority adds thatits rule is necessary to avoid “ a theory of liability similar to—but broader in application than”—§20(a)’s liability, for “ ‘[e]ve ry person who, directl y or indirectly, controls any person liable’ ” for violations of the securities laws. Ante , at 10 (quoting 15 U. S. C. A. §78t(a) (Feb. 2011 Supp.)). But th at is not so. This Court has explain e d that the possibility of an express remedy under the s e curities la ws does notpreclude a claim under §10(b). Herman & MacLeanv. Hu ddleston , 459 U. S. 375, 388 (1983). More importantly, aperson who is liable un der §20(a) controls another “ pers on” who is “liable” for a securities violation. Morrisonv. National A u stralia Bank Ltd. , 56 1 U. S. ___, _ __, n. 2 (20 10) (slip op ., at 3, n. 2 ) (“Liability under §20(a) is obviously derivative of liability under some other provision of the Exchan ge Act”). We here examin e whether a person is p r imarily liable whethe r they do, or they do not , control an other person who is li able

. Tha t is to say, here, the liability of some “other pers on” is not at issue. And there is at least one signific ant category of cases that §10(b) may addres s that derivative forms of liability, such as under §20(a), cannot, namely, cases in which one actor exploits another as an innoc e nt intermediary for it s misstatements. Here, it may well be thatthe Fund’s board of trustees knew nothing about the f a lsity of th e prospectuses. See, e.g., In re Lammert , Release No. 348, 93 S. E. C. Docket 567 6, 5700 (20 08) (Janus Management

was awa r e of market timing in th e Janus Fu nd no later than 2002, but “[t]his knowledge was never shared with the Board”). And if so, §20(a) would not apply. The possib ility of guilty management and innocent board is the 13th stro ke of the new rule’s clock. What is to10 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### happen when guilty management writes a prospectus (for the board) containing materially false statements and fools both board and public into believing they are tru e ? Apparentlyunder the majority’s rule, in such circum

stances no one could be found to have “ma[d]e” a materially false statement—even tho u gh under the common law the managers would lik ely have been guilty or liable (in analogous circumstances) for doing so as principa ls (and not as aiders and abettors). See, e.g., 2 W. LaFave , Substantive Criminal Law §13.1(a) (2d ed. 2003); 1 M. Hale, Pleas of the Crown 617 (1736); Perkin s, Parties to Crime, 89 U. Pa. L. Rev. 581, 583 (1941) (one is guilty as a principal when one uses an innocent third par t y to commit a crime); Restatement (Second) of Torts §533 (1976). Cf. United Sta t esv. Giles , 300 U. S. 41, 48–49 (1937).

Indeed, under the majority’s rule it seems unlikely that the SEC it self in such circumst ances could exercise the authority Congress has granted it to pursue primary violators who “mak e” false state m ents or the authority that Con gre ss has specifically provided to prosecute aiders and abettors to securities violations. See §104, 109 Sta t

. 757 (codified at 15 U. S. C. A. §78 t (e) (Feb. 2011 Supp.)) (granting SEC authori ty to prosecute aiders an d abettors). That is because the m anagers, not having “ma[d]e” the statement, would not be liable a s principal s and there would be no other primary violator they might have tried to “ai d” or “abet. ” Ibid.; SEC v. DiBell a , 587 F. 3d 553, 566 (CA2 2009) (prosecuti on for aiding and ab etting requires primary violation to which o ffender gave “substantial assistan ce” (internal quotation marks omitted)). If the majority believes, as its footn o te hints, that §20(b) could provide a basis f o r liability in this case, ante, at 10,

n. 10, then it should remand the case for pos s ible am endment of th e complaint. “ T here is a dearth of authority construing Section 20(b),” which has been thought largely11 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### “superfluous in 10b–5 cases.” 5B A. Jacob s, Disclosure and Remedies Under the Securities Law §11–8, p. 11–72 (2011). He nce respondent, who re asonably thought that i t referred to the proper securities l a w provision, is faultless for failing to mention §20(b) as well. In sum, I can find nothing in §10(b) or in Rule 10b–5, its language, its history, or inpre c edent suggesting that Congress, in enactingthe secur i ties laws, intended a loophol e of the k i nd that th e majority’s ru le may well create. II Rejecting t h e majority ’s rule , of course, does not decide the question before us. We must still determine whether, in light of t h e complaint’s allegations, Janus Management could have “ma[d]e” the false statements in the prospectuses at issue. In my vi ew, the answer to thi s question is “Yes.” The specifi crelationships alleged among Janus Management, the Janus Fund, and the prospectus statements warran tth e conclusion that Janus Management did “make” those statements. In part, myconclusion reflects the fact that this Cour t and lower courts have made clear that at least s o met i mes corporate officials and others can be held liable under Rule 10b–5 for having “ma [ d]e” a materially fals e statemen t even when that state m ent appears in a document (or is made by a third person) that the officials do not legally control. In Herm an & MacLean , for example, this Court pointed out that “certain individuals who play a part in preparing t h e registrat i on statement,” includi n g corpora t e officers, lawyers, and accountants, may be primarily liable even where “they are not nam ed as having prepared or certified” th e registration statement. 459 U. S., at 386, n

. 22. And as I have alrea d y pointed out, this Court wrote in Central Bank that a “lawyer, acco untant, or bank, who

. . . makes a material mis s tatement (or omissi on) on which a12 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### purchaser o rseller of securities relies may be liable as a primary violator und er 10b–5, assuming all of the requirements for prima r y liability under Rul e 10b–5 are met.” 511 U. S., at 19 1 (some em phasis added). Given the statements in our opinions, it is not surpris

ing that lower courts have found primary liability for actors wit h out “ultimate authority” overissued statements. One court, for example, concluded that an accountant could be pr imarily liable for having “ma[d]e” false statements, whe r e he issued fraudulent opinion and certification letters re produced i nprospectuses, annual reports, an d other cor p orate mat e rials for which he wa s not ultimately responsible. Anixter v. Ho me-S ta ke Production Co. , 77 F. 3d 1215, 1225–1227 (CA10 1996). In a later case postdating Stonerid ge , that cour t reaffirmed that an outside consultant could be primarily liable f o r having “ma[d]e” fals e statements, where he drafted fraudulent quarterly a n d annual filing statements later reviewed and certified by the firm’s auditor, officers, an d counsel. SEC v. Wolf son , 539 F. 3d 1249, 1261 (CA1 0 2008). And another co urt found that a corporation’s chi e f financial of ficer could be held primarily liable as having “ma[d]e” m i sstatements that appeared in a form 10–K that she prepared but did not signor file. McConvillev. SEC, 465 F. 3d 780, 787 (CA7 2006). One can al so easily find lower court cases explaining that corporate officials may be liable for having “ma[d]e” false state m ents where thoseofficials use innoce nt persons as conduits through which the false statements reach the public (without necessarily attributing the false statements to the offici als). Se e, e. g

. , In re Navarr e Cor p

. Securi tie sL i tiga tion , 2 99 F. 3d 73 5, 743 (CA8 2002) (liability may be premised on use of a nalysts as a conduit to communicate false stat ements to market); Inre Ca ble t ro n System s, Inc. , 311 F. 3d 11, 38 (CA1 2002) (rejecting a test requiring legal “control” over thirdparties making state­13 Cite as: 56 4 U

. S. ____ (2011)

B REYER , J., diss enting 

### ments as giving “com p any officials too mu ch leeway to commit fraud on the market by using analysts as their mouthpieces” (internal quotation marks omitted)); Nova k

v. Kasaks , 216 F. 3d 300, 314–31 5 (CA2 2000); Cooperv. Pickett , 137 F. 3d 616, 624 (CA9 1997); Free landv. Irid

ium World Communications, Ltd. , 545 F. Supp. 2d 59, 75 – 76 (DC 200 8). My conclusion also reflects the par t icular circ umstances that the complaint alleges. The complaint states that “Janus Management, as investment advisor to the fun d s, is responsible for the day-to-day manage m ent of its investment portfolio and other business af fairs of the funds. Jan us Management furni s hes advice and recommendations concerning the funds’ investments, as well a s administrative, compliance and accounting services for th e funds.” Complaint ¶18, App. to Pet. for Cert. 65a. Each of the Fund’s 17 officers was a vice president of Janu s Management. App. 250a–258a. The Fund has “no ass e ts separate and apart fro m those they hold for shareholders.” In re Mutual Funds Inv. Litigation , 384 F. Supp. 2d 8 45, 853, n. 3 (M d. 2005). Janus M anagement disseminat ed the fund prospectuses through its parent company’s W e b site. Complaint ¶38, App. to Pet. for Cert. 72a. Janu s Management employees drafted and reviewed the Fund prospectuses, including languag e about “market timing. ” Complaint ¶31, id. , a t69a; In re Mutual Funds Inv. Litiga tion , 590 F. Supp. 2d 741, 747 (Md. 2008). And Janus Management may well have kept the trustees in the dark about the true “ m arket timing” fac t s. Complaint ¶51, App. to Pet. for Cert. 80a; In re Lamm er t , 93 S. E. C. Docket, at 5 700. Given thes e circumsta n ces, as long as some managers, sometimes, can be held to have “m a[d]e” a ma terially fals e statement, Janus Man a gement can be h e ld t o have don e so on the facts alleged here. T h e relationship betwee n Janus Man a gement and the Fund could hardly have been14 JANU S CAPI TAL GROUP, INC. v. FIRST DERIVATIV E TRADERS B REYER , J., diss enting 

### closer. Janus Management’s involvement in preparin g and writing the relevant statem ents could hardly ha ve been greater. And there is a seri ous suggestion that the board itself knew little or nothing about the fa lsity of what was said. See supra , at 9, 13. Unless we ad opt a formal rule (as the majority here has don e ) that would arbitrarily exclude from the scope of the word “mak e” those who manage a firm—even when those managers perpetrate a fraud thro ugh an unknowing intermediary—the ma nagement co mpany at i ssue here falls within that s c ope. We should hold the allegations in the complaint in this respect legally sufficient. With respect, I dissent.