Business Crimes Perspectives

SEC v. TAMBONE: The First Circuit Reverses Course on What It Means to "Make" a Statement Under the Securities Laws

March 23, 2010

In this issue:

  • Sitting en banc, the First Circuit vacated a key portion of its prior panel decision and affirmed the district court’s dismissal of the SEC’s Section 10(b)/Rule 10b- 5 claim against two mutual fund underwriters.
  • The court rejected the SEC’s argument that a person who uses a false statement drafted by others to sell securities is liable for “making” that statement under Rule 10b-5.
  • While this ruling closes one door to primary violator liability, others doors may yet remain open depending on the specific allegations of each case, and the First Circuit declined to choose sides in the current circuit split regarding the scope of primary liability.


The First Circuit’s en banc ruling in SEC v. Tambone, No. 07-1384 (Mar. 10, 2010), vacated a key part of a prior ruling by a three-judge panel, and provides important guidance on the scope of “primary violator” liability under Section 10(b) of the 1934 Exchange Act and Rule 10b-5 thereunder... (continues)

Download the Foley Hoag Business Crimes Perspectives - March 2010 Issue (.pdf)