United States Securities & Exchange Commission v. Benger, 931 F. Supp. 2d 904

Defendants moved to join and adopt briefing to dismiss Counts I–III of SEC complaint; Counts I–II concern Section 17(a) claims; Count III is dismissed per related ruling on Janus/Section 10(b) issues?
Court previously ruled Janus does not apply to 17(a) claims; Morrison concerns discussed for domestic vs. extraterritorial reach.
SEC argues Counts I–II pass Morrison and Janus to state a 17(a) claim; movants argue Janus controls but court disagrees.
Court cites Sentinel and others to reject Janus applicability to 17(a) claims; most courts align with that stance.
The boiler room allegations are relevant to scienter and admissible under Rule 401; not to be stricken; overall conclusion grants in part, denies in part at 10b-5
Conclusion: grant in part and deny in part; 10b-5(b) survives; 1a-5(a)/(c) claims dismissed; boiler room allegations remain for context

Issue	Plaintiff's Argument	Defendant's Argument	Held
Janus applicability to Counts I–II 17(a) claims	SEC argues Janus does not apply	Movants argue Janus governs 10b-5 only	Janus does not apply to Counts I–II
Morrison applicability to Counts I–II	SEC relies on Morrison to avoid dismissal	Morrison requires dismissal of domestic allegations	Counts I–II dismissed under Morrison
Boiler room allegations should be stricken	Allegations necessary to show scienter	Allegations should be dismissed as boiler room	Boiler room allegations need not be stricken

Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (U.S. 2011) (defining 'maker' under Rule 10b-5)
S.E.C. v. Stoker, 865 F. Supp. 2d 457 (S.D.N.Y. 2012) ( adopts Janus-exemption analysis against 17(a) claims)
Hills v. United States, 488 Fed.Appx. 569 (3d Cir. 2012) (evidence and Rule 404(b) admissibility)
Bonds v. Coca-Cola Co., 806 F.2d 1324 (7th Cir. 1986) (policies caution against private action expansion)