Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., et al.

Case Updates

The Supreme Court held that Section 10(b) of the Securities Exchange Act does not authorize a private right of action against third parties unless plaintiffs can demonstrate reliance on the defendants’ own conduct.

NCLC urged the Supreme Court to affirm the Eighth Circuit’s conclusion that Section 10(b) of the Securities Exchange Act does not authorize a private right of action against third parties for so-called “scheme liability.” In its brief, NCLC argued that that scheme liability - which is nothing more than aiding and abetting liability in disguise and is not supported by the terms of the statute - would disadvantage American issuers of securities because they would have to price their commercial transactions to reflect the substantial added risk of liability for their business partners. To avoid litigation risk, both domestic and foreign companies would have significant incentives to do business with companies listed on foreign exchanges, or with private companies.