Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, October 23, 2011

Poser on Janus Capital

The Supreme Court’s Janus Capital Case, by Norman S. Poser, Brooklyn Law School, was recently posted on SSRN.  Here is the abstract:

In Janus Capital Group, Inc. v. First Derivative Traders, a divided Supreme Court created the unprecedented doctrine that the investment adviser to a mutual fund that drafted and distributed a false prospectus for the fund did not “make” a false statement under Rule 10b-5 because the fund, and not the adviser, had “ultimate authority” over the prospectus. The author argues that the decision was out of touch with reality because it failed to give proper consideration to the unique structure of the mutual fund industry. Furthermore, the decision is an illustration of judicial activism, and is likely to protect fund advisers and other corporate officials from liability for their own fraudulent actions

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