Lead Opinion
delivered the opinion of the Court.
This case requires us to determine whether
I
Janus Capital Group, Inc. (JCG), is a publicly traded company that created the Janus family of mutual funds. These mutual funds are organized in
Although JCG created Janus Investment Fund, Janus Investment Fund is a separate legal entity owned entirely by mutual fund investors. Janus Investment Fund has no assets apart from those owned by the investors. JCM provides Janus Investment Fund with investment advisory services, which include “the management and
As the securities laws require, Janus Investment Fund issued prospectuses describing the investment strategy and operations of its mutual funds to investors. See §§ 77b(a)(10), 77e(b)(2), 80a-8(b), 80a-2(a)(31), 80а-29(aHb) (2006 ed.). The prospectuses for several funds represented that the funds were not suitable for market timing and can be read to suggest that JCM would implement policies to curb the practice.
In September 2003, the attorney general of the State of New York filed a complaint against JCG and JCM alleging that JCG entered into secret arrangements to permit market timing in several funds run by JCM. After the complaint’s allegations becamе public, investors withdrew significant amounts of money from the Janus Investment Fund mutual funds.
Respondent First Derivative Traders (First Derivative) represents a class of plaintiffs who owned JCG stock as of September 8, 2003. Its complaint asserts claims against JCG and JCM for violations of Rule 10b-5 and § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U. S. C. §78j(b). First Derivative alleges that JCG and JCM “caused mutual fund prospectuses to be issued for Janus mutual funds and made them available to the investing public, which created the misleading impression that [JCG and JCM] wоuld implement measures to curb market timing in the Janus [mutual funds].” App. to Pet. for Cert. 60a. “Had the truth been known, Janus [mutual funds] would have been less attractive to investors, and consequently, [JCG] would have realized lower revenues, so [JCG’s] stock would have traded at lower prices.” Id,, at 72a.
The District Court dismissed the complaint for failure to state a claim.
II
We granted certiorari to address whether JCM can be held liable in a private action under Rule 10b-5 for false statements included in Janus Investment Fund’s prospectuses.
A
The SEC promulgated Rule 10b-5 pursuant to authority granted under § 10(b) of the Securities Exchange Act of 1934, 15 U. S. C. § 78j(b). Although neither Rule 10b-5 nor § 10(b) expressly creates a private right of action, this Court has held that “a private right of action is implied under § 10(b).” Superintendent of Ins. of N. Y. v. Bankers Life & Casualty Co.,
1
One “makes” a statement by stating it. When “make” is paired with a noun expressing the action of a verb, the resulting phrase is “approximately equivalent in sense” to that verb. 6 Oxford English Dictionary 66 (def. 59) (1933) (hereinafter OED); accord, Webster’s New International Dictionary 1485 (def. 43) (2d ed. 1934) (“Make followed by a noun with the indefinite article is often nеarly equivalent to the verb intransitive corresponding to that noun”). For instance, “to make a proclamation” is the approximate equivalent of “to proclaim,” and “to make a promise” approximates “to promise.” See 6 OED 66 (def. 59). The phrase at issue in Rule 10b-5, “[t]o make any . . . statement,” is thus the approximate equivalent of “to state.”
For 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. Without 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. And in the ordinary case, attribution within a statement or implicit from surrounding circumstances is strong evidence thаt a statement was made by— and only by — the party to whom it is attributed. This rule might best be exemplified by the relationship between a speechwriter and a speaker. 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.
This rule follows from Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A.,
Our holding also accords with the narrow scope that we must give the implied private right of action. Id., at 167. Although the existence of the private right is now settled, we will not expand liability beyond the person or entity that ultimately has authority over a false statement.
2
The Government contends that “make” should be defined as “create.” Brief for United States as Amicus Curiae 14-15 (citing Webster’s New International Dictionary 1485 (2d ed. 1958) (defining “make” as “[t]o cause to exist, appear, or occur”)). This definition, although perhaps appropriate when “make” is directed at an object unassociated with a verb (e. g., “to make a chair”), fаils to capture its meaning when directed at an object expressing the action of a verb.
Adopting the Government’s definition of “make” would also lead to results inconsistent with our precedent. The Government’s definition would permit private plaintiffs to sue a person who “provides the false or misleading information that another person then puts into the statement.” Brief for United States as Amicus Curiae 13.
For its part, First Derivative suggests that the “well-recognized and uniquely close relationship between a mutual fund and its investment adviser” should inform our decision. Brief for Respondent 21. It suggests that an investment adviser should generally be understood to be the “maker” of statements by its client mutual fund, like a playwright whose lines are delivered by an actor. We decline this invitation to disregard the corporate form. Although First Derivative and its amici persuasively argue that investment advisers exercise significant influence over their client funds, see Jones v. Harris Associates L. P.,
Congress also has established liability in § 20(a) for “[ejvery person who, directly or indirectly, controls any person liable” for violations of the securities laws. §78t(a) (2006 ed., Supp. IV). First Derivative’s theory of liability based on a relationship of influence resembles the liability imposed by Congress for control. To adopt First Derivative’s theory would read into Rule 10b-5 a theory of liability similar to — but broader in application than, see post, at 156— what Congress has already created expressly elsewhere.
B
Under this rule, JCM did not “make” any of the statements in the Janus Investment Fund prospectuses; Janus Investment Fund did. Only Janus Investment Fund — not JCM— bears the statutory obligation to file the prospectuses with the SEC. §§77e(b)(2), 80a-8(b), 80a-29(a)-(b); see also 17 CFR .§ 230.497 (imposing requirements on “investment companies”). The SEC has recorded that Janus Investment Fund filed the prospectuses. See JIF Groupl Standalone Prospectuses (Feb. 25, 2002), online at http://www. sec.gov/Archives/edgar/data/277751/000027775102000049/ 0000277751-02-000049.txt (as visited June 10, 2011, and available in Clerk of Court’s case file) (recording
First Derivative suggests that both JCM and Janus Investment Fund might have “made” the misleading statements within the meaning of Rule 10b-5 because JCM was significantly involved in preparing the prospectuses. But this assistance, subject to the ultimate control of Janus Investment Fund, does not mean that JCM “made” any statements in the prospectuses. Although JCM, like a speechwriter, may have assisted Janus Investment Fund with crafting what Janus Investment Fund said in the prospectuses, JCM itself did not “make” those statements for purposes of Rule 10b-5.
* * *
The statements in the Janus Investment Fund prospectuses were made by Janus Investment Fund, not by JCM. Accordingly, First Derivative has not stated a claim against JCM under Rule 10b-5. The judgment of the United States Court of Appeals for the Fourth Circuit is reversed.
It is so ordered.
Notes
Market timing is a trading strategy that exploits timo delay in mutual funds’ daily valuation system. The price for buying or selling shares of a mutual fund is ordinarily determined by the next net asset value (NAV) calculation after the order is placed. The NAV calculation usually haрpens once a day, at the close of the major U. S. markets. Because of certain time delays, however, the values uood in these calculations do not always accurately reflect the true value of the underlying assets. For example, a fund may value its foreign securities based on the price at the close of the foreign market, which may have occurred several hours boforo the calculation. But events might have taken place after the close of the foreign market that could be expected to affect their price. If the event were expected to increase the price of the foreign securities, a market timing investor could buy shares of a mutual fund at the artificially low NAV and sell the next day when the NAV corrects itself upward. See Disclosurе Regarding Market Timing and Selective Disclosure of Portfolio Holdings, 68 Fed. Reg. 70402 (proposed Dec. 17, 2003).
In 2004, JCG and JCM sottlod thoso allegations and agreed to reduce their fees by $125 million and pay $50 million in civil penalties and $50 million in disgorgement to the mutual fund investors.
The elements of a private action under Rule 10b-5 are “(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or salo of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.” Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc.,
Rule 10b-5 makes it “unlawful for any person, directly or indirectly, by tho ueo of any moans or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, . . . [t]o mako any untrue statement of a material fact or to omit to state a material fact nocoesary in order to make the statements made, in the light of the circumstances under which they were made, not misleading . . . .” 17 CFR §240.10b-5(b).
Although First Derivative argued below that JCG violated Rule 10b-5 by making the statements in the prospectuses, it now seeks to hold JCG liable solely as a control person of JCM under § 20(a). The only question we must answer, therefore, is whether JCM made the misstatements. Whether First Derivative has stated a claim against JCG as a control person depends on whether it has stated a claim against JCM.
Tho disoont eorroetly notes that Central Bank involved secondary, not primary, liability. Post, at 158 (opinion of Breyer, J.). But for Central Bank to have any moaning, there must be some distinction between thoac who aro primarily liable (and thue may be pursued in private suite) and those who aro secondarily liable (and thus may not be pursued in private suits).
We draw a clean linе between the two — the maker is the person or entity with ultimate authority over a statement and others are not. In contrast, the dissent’s only limit on primary liability is not much of a limit at all. It would allow for primary liability whenever “[t]he specific rola tionships alleged... warrant [that] conclusion” — whatever that may mean. Post, at 158.
We agree that "no one in Stoneridge contended thal the equipment suppliers were, in fact, the makers of the cable company's misstatements.” Poots at 166. If Stonoridgo had addrcoood whether the equipment euppli-ero were “makers," today’s decision would be unnecessary. The point is that Stoneridge’s analysis suggests that they were not.
Because we do not find the meaning of “make” in Rule 10b-5 to be ambiguous, we need not consider the Government’s assertion that we should defer to the SEC's interpretation of the word elsewhere. Brief for United States as Amicus Curiae 13 (citing Brief for SEC as Amicus Curiae in Pacific Inv. Mgmt. Co. LLC v. Mayer Brown LLP, No. 09-1619 (CA2), p. 7); see Christensen v. Harris County,
Nor does First Derivative contend that any statements made by JCM to Janus Investment Fund were “public statements” for the purposes of Basic Inc. v. Levinson,
We do not address whether Congress created liability for entities that act through innocent intermediaries in 15 U. S. C. § 78t(b). See Tr. of Oral Arg. 6, 61.
First Derivative suggests that “indirectly” in Rule 10b-5 may broaden the meaning of “make.” We disagree. The phrase “directly or indirectly” is set off by itself in Rule 10b-5 and modifies not just “to make,” but also “to employ” and “to engage.” We think the phrase merely clarifies that as long as a statement is made, it docs not matter whether the statement was communicated directly or indirectly to the recipient. A different understanding of “indirectly” would, like a broad definition of “make,” threaten to erase the line between primary violators and aiders and abettors established by Central Bank.
In this case, wo nood not dofino procisoly what it moans to communicate a “made” statement indirectly because none of the statements in the prospectuses were attributed, explicitly or implicitly, to JCM. Without attribution, there is no indication that Janus Investment Fund was quoting or othеrwise repeating a statement originally “made” by JCM. Cf. Anixter v. Home-Stake Production Co.,
That JCM provided access to Janus Investment Fund’s prospectuses on its Web site is also not a basis for liability. Merely hosting a document on a Web site docs not indicate that the hosting entity adopts the docu ■ ment as its own statement or exercises control over its content. Cf. United States v. Ware,
Dissenting Opinion
dissenting.
This case involves a private Securities and Exchange Commission (SEC) Rule 10b-5 action brought by a group of investors against Janus Capital Group, Inc., and Janus Capital Management LLC (Janus Management), a firm that acted as an investment adviser to a family of mutual funds (collectively, the Janus Fund or Fund). The investors claim that Janus Management knowingly made materially false or misleading statements that appeared in prospectuses issued by the Janus Fund. They say that they relied upon
Janus Management and the Janus Fund are closely related. Each of the Fund's officers is a Janus Management employee. Janus Management, acting through those employees (and other of its еmployees), manages the purchase, sale, redemption, and distribution of the Fund’s investments. Janus Management prepares, modifies, and implements the Janus Fund’s long-term strategies. And Janus Management, acting through those employees, carries out the Fund’s daily activities.
Rule 10b — IS says in relevant, part that 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. 17 CFR § 240.10b-5(b) (2010) (emphasis added). See also 15 U. S. C. § 78j(b) (2006 ed., Supp. IV) (§ 10(b) of the Securities Exchange Act of 1934). The specific legal question before us is whether Janus Management can be held responsible under the Rule for having “ma[d]e” certain false statements about the Janus Fund’s activities. The statements in question appear in the Janus Fund’s prospectuses.
The Court holds that only the Janus Fund, not Janus Manаgement, could have “ma[d]e” those statements. The majority points out that the Janus Fund’s board of trustees has “ultimate authority” 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 communicate it,” can “make” a statement within the terms of Rule 10b~5. Ante, at 142.
In my view, however, the majority has incorrectly interpreted the Rule’s word “make.” Neither common English nor this Court’s earlier cases limit the scope of that word to those with “ultimate authority” over a statement's content. To the contrary, both language and case law indicate that, depending upon the circumstances, a management company, a board of trustees, individual company officers, or others, separately or together, might “mаke” statements contained in a firm’s prospectus — even if a board of directors has ultimate content-related responsibility. And the circumstances here are such that a court could find that Janus Management made the statements in question.
HH
Respondent s complaint sets forth the basic elements of a typical Rule 10b-5 “fraud on the market” claim. It alleges that Janus Management made statements that “created the misleading impression that” it “would implement measures to curb” a trading strategy called “market timing.” Second Amended Complaint ¶6 (hereinafter Complaint), App. to Pet. for Cert. 60a. The complaint adds that Janus Management knew that these “market timing” statements were false; that the statements were material; that the market, in pricing securities (including related securities) relied upon the statemеnts; that as a result, when the truth came out (that Janus Management indeed permitted “market timing” in the Janus Fund), the price of relevant shares fell; and the false statements thereby caused respondent significant economic losses. Complaint ¶¶4-10, id., at 60a-63a. Cf. Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc.,
The majority finds the complaint fatally flawed, however, because (1) Rule 10b-5 says that no “person” shall “directly or indirectly . . . make any untrue statement of a material fact,” (2) the statements at
But where can the majority find legal support for the rule that it enunciates? The English language does not impose upon the word “make” boundaries of the kind thе majority finds determinative. Every day, hosts of corporate officials make statements with content that more senior officials or the board of directors have “ultimate authority” to control. So do cabinet officials make statements 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 from saying that several different individuals, separately or together, “make” a statement that each has a hand in producing. For example, as a matter of English, one can say that a national political party has made a statement even if the only written communication consists of uniform press releases issued in the 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) speak about the matter; and one can say that the President has made a statement even if his press officer issues a communication, sometimes in the press officer’s own name. Practical matters related to context, including control, participation, and relevant audience, help determine who “makes” a statement and to whom that statement may properly be “attributed,” see ante, at 147, n. 11 — at least as far as ordinary English is concerned.
Neither can the majority find support in any relevant precedent. The majority says that its rule “follows from Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A.,
Central Bank is a case about secondary liability, liability attaching, not to an individual making a false statement, but to an individual helping someone else do so. Central Bank involved a bond issuer accused of having made materially false statements, which overstated the values of property that backed the bonds. Central Bank also involved a defendant that was a bank, serving as indenture trustee, which was supposed to check the bond issuer’s valuations. The plaintiffs claimed that the bank delayed its valuation checks and thereby helped the issuer make its false statements credible. The question before the Court concerned the bank’s liability — a secondary liability for “aiding and abetting” the bond issuer, who (on the theory set forth) was primarily liable.
The Court made this clear. The question presented was “whether private civil liability under § 10(b) extends ... to those who do not engage in the manipulative or deceptive practice, but who aid and abet the violation.”
By way of contrast, the present case is about primary liability — about individuals who allegеdly themselves “make” materially false statements, not about those who help others to do so. The question is whether Janus Management is primarily liable for violating the Act, not whether it simply helped others violate the Act. The Central Bank defendant concededly did not make the false statements in question (others did), while here the defendants allegedly did make those statements. And a rule (the majority’s rule) absolving those who allegedly did, make false statements does not “follow from” a rule (Central Bank’s rule) absolving those who concededly did not do so.
The majority adds that to interpret the word “make” as including those “without ultimate control over the content of a statement” would “substantially undermine” Central Bank’s holding. Ante, at 143. Would it? The Court in Central Bank specifically wrote that its holding did
“not mean that secondary actors in the securities markets are always free from liability under the securities Acts. Any person or entity, including a lawyer, accountant, or bank, who employs a manipulative device or makes a material misstatement (or omission) on which a purchaser or seller of securities relies may be liable as a primary violator under 1 Ob-5, assuming all of the requirements 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 firm officials, officials tasked to develop a marketing document, large investors, or others (taken together or separately) all might “make” materially false statements subjecting themselves to primary liability. The majority’s rule does not protect, it extends, Central Bank’s holding of no-liability into new territory that Central Bank explicitly placed outside that holding. And by ignoring the language in which Central Bank did so, the majority’s rule itself undermines Central Bank. Where is the legal support for the majority’s “draw[ing] a clean line,” ante, at 143, n. 6, that so seriously conflicts with Central Bank? Indeed, where is the legal support for the majority’s suggestion that plaintiffs must show some kind of “attribution” of a statement to a defendant, ante, at 147, n. 11 — if it means plaintiffs must show, not only that the defendant “ma[d]e” the statement, but something more?
The majority also refers to Stoneridge, but that case offers it no help. In Stoneridge, firms that supplied electronic equipment to a cable television company agreed with the cable television company to enter into a series, of fraudulent sаles and purchases, for example, a sale at an unusually high price, thereby providing funds which the suppliers would use to buy advertising from the cable television company. These
The Court held that the equipment suppliers could not be found liable for securities fraud in a private suit under § 10(b). But in doing so, it did not deny that the equipment suppliers had made the false statements contained in the letters, contracts, and conversations. See id., at 158-159. Rather, the Court said the issue in the case was whether “any deceptive statement or act respondents made was not aсtionable because it did not have the requisite proximate relation to the investors’ harm.” Ibid, (emphasis added). And it held that these deceptive statements or actions could not provide a basis for liability because the investors could not prove sufficient reliance upon the particular false statements that the equipment suppliers had made.
The Court pointed out that the equipment suppliers “had no duty to disclose; and their deceptive acts were not communicated to the public.” Id., at 159. And the Court went on to say that “as a result,” the investors “cannot show reliance upon any” of the equipment suppliers’ actions, “except in an indirect chain that we find too remote for liability.” Ibid. The Court concluded:
“[The equipment suppliers’] deceptive acts, which were not disclosed to the investing public, are too remote to satisfy the requirement of reliance. It was [the cable company], not [the equipment suppliers], that misled its auditor and filed fraudulent financial statements; nothing [the equipment suppliers] did made it necessary or inevitable for [the cable company] to record the transactions as it did.” Id., at 161.
Insofar as the equipment suppliers’ conduct was at issue, the fraudulent “arrangement. . . took place in the marketplace for goods and services, not in the investment sphere.” Id., at 166.
It is difficult for me to see how Stoneridge “support[sj” the majority’s rule. Ante, at 143. No one in Stoneridge disputed the making of the relevant statements, the fraudulent contracts, and the like. And no one in Stoneridge contended that the equipment suppliers were, in fact, the makers of the cable company’s misstatements. Rather, Stoneridge was concerned with whether the equipment suppliers’ separate statements were sufficiently disclosed in the securities marketplace so as to be the basis for investor reliance. They were not. But this is a different inquiry than whether statements acknowledged to have been disclosed in the securities marketplace and ripe for reliance can be said to have been “ma[d]e” by one or
The majority adds that its rule is necessary to avoid “a theory of liability similar to — but broader in application than” — §20(a)’s liability, for “ '[ejvery person who, directly or indirectly, controls any person liable’ for violations of the securities laws.” Ante, at 146 (quoting 15 U. S. C. § 78t(a). But that is not so. This Court has explained that the possibility of an express remedy under the securities laws does not preclude a claim under § 10(b). Herman & MacLean v. Huddleston,
More importantly, a person who is hable under § 20(a) controls another “person” who is “liable” for a securities violation. Morrison v. National Australia Bank Ltd.,
And there is at least one significant cаtegory of cases that § 10(b) may address that derivative forms of liability, such as under § 20(a), cannot, namely, cases in which one actor exploits another as an innocent intermediary for its misstatements. Here, it may well be that the Fund’s board of trustees knew nothing about the falsity of the prospectuses. See, e. g., In re Lammert, Release No. 348, 93 S. E. C. Docket 5676, 5700 (2008) (Janus Management was aware of market timing in the Janus Fund no’ later than 2002, but “[t]his knowledge was never shared with the Board”). And if so, § 20(a) would not apply.
The possibility of guilty management and innocent board is the 13th stroke of the new rule’s clock. What is to happen when guilty management writes a prospectus (for the board) containing materially false statements and fools both board and public into believing they are true? Apparently under the majority’s rule, in such circumstances no one could be found to havе “ma[d]e” a materially false statement — even though under the common law the managers would likely have been guilty or liable (in analogous circumstances) for doing so as principals (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); Perkins, Parties to Crime, 89 U. Pa. L. Rev. 581, 583 (1941) (one is guilty as a principal when one uses an innocent third party to commit a crime); Restatement (Second) of Torts §533 (1976). Cf. United States v. Giles,
Indeed, under the majority’s rule it seems unlikely that the SEC itself in such circumstances could exercise the authority Congress has granted it to pursue primary violators who “make” false statements or the authority that Congress has specifically provided to prosecute aiders and abettors to securities violations. See § 104, 109 Stat. 757 (codified at 15 U. S. C. § 78t(e)) (granting SEC authority to prosecute aiders and abettors). That is because the managers, not having “ma[d]e” the statement, would not be liable as principals and there would be no other primary violator they might have tried to “aid” or “abet.” Ibid.; SEC v. DiBella,
In sum, I can find nothing in § 10(b) or in Rule 10b-5, its language, its history, or in precedent suggesting that Congress, in enacting the securities laws, intended a loophole of the kind that the majority’s rule may well create.
II
Rejecting the majority’ s rule, of course, does not decide the question before us. We must still determine whether, in light of the complaint’s allegations, Janus Management could have “ma[d]e” the false statements in the prospectuses at issue. In my view, the answer to this question is “Yes.” The specific relationships alleged among Janus Management, the Janus Fund, and the prospectus statements warrant the conclusion that Janus Management did “make” those statements.
In part, my conclusion reflects the fact that this Court and lower courts have made clear that at least sometimes corporate officials and others can be held liable under Rule 10b-5 for having “ma[d]e” a materially false statement even when that statement appears in a document (or is made by a third person) that the officials do not legally control. In Herman & MacLean, for example, this Court pointed out that “certain individuals who play a part in preparing the registration statement,” including corporate officers, lawyers, and accountants, may be primarily liable even where “they are not named as having prepared or certified” the registration statement.
Given tbe statements in our opinions, it is not surprising that lower courts have found , primary liability for actors without “ultimate authority” over issued statements. One court, for example, conсluded that an accountant could be primarily liable for having “ma[d]e” false statements, where he issued fraudulent opinion and certification letters reproduced in prospectuses, annual reports, and other corporate materials for which he was not ultimately responsible. Anixter v. Home-Stake Production Co.,
One can also easily find lower court cases explaining that corрorate officials may be liable for having “ma[d]e” false
My conclusion also reflects the particular circumstances that the complaint alleges. The complaint states that “Janus Management, as investment advisor to the funds, is responsible for the day-to-day management of its invеstment portfolio and other business affairs of the funds. Janus Management furnishes advice and recommendations concerning the funds’ investments, as well as administrative, compliance and accounting services for the funds.” Complaint ¶ 18, App. to Pet. for Cert. 65a. Each of the Fund’s 17 officers was a vice president of Janus Management. App. 250a-258a. The Fund has “no assets separate and apart from those they hold for shareholders.” In re Mutual Funds Inv. Litigation,
Given these circumstances,. as long as some managers, sometimes, can be held to have “ma[d]e” a materially false statement, Janus Management can be held to have done so on the facts alleged here. The relationship between Janus Management and the Fund could hardly have been closer. Janus Management’s involvement in preparing and writing the relevant statements could hardly have been greater. And there is a serious suggestion that the board itself knew little or nothing about the falsity of what was said. See supra, at 157, 160. Unless we adopt a formal rule (as the majority here has done) that would arbitrarily exclude from the scope of the word “make” those who manage a firm— even when those managers perpetrate a fraud through an unknowing intermediary — the management company at issue here falls within that scope. We should hold the allegations in the complaint in this respect legally sufficient.
With respect, I dissent.