Opinion ID: 3014742
Heading Depth: 2
Heading Rank: 4

Heading: Is there controlling-person liability?

Text: Section 20(a) of the Exchange Act provides for liability for “controlling person[s].” 15 U.S.C. § 78t. Section 20(a) makes controlling persons jointly and severally liable with the controlled person. Id. But controlling-person liability is “premised on an independent violation of the federal securities 32 laws.” In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 211 (3d Cir. 2002); Shapiro v. UJB Fin. Corp., 964 F.2d 272, 279 (3d Cir. amended 1992). Because the District Court found that Union had not sufficiently alleged a securities violation, the Court dismissed its section 20(a) claims.12 Union, of course, argues that the Court erred in dismissing its section 10(b) and section 11 claims; it therefore claims that its section 20(a) claims were also incorrectly dismissed. Because the District Court was correct in dismissing Union’s other claims, leaving Union with no valid section 20(a) claim, we agree as well with the District Court’s conclusion as to that claim.