In Janus Capital Group, Inc. v. First Derivative Traders,1 the Supreme Court addressed the scope of primary liability in private actions under Rule 10b-52 (promulgated pursuant to Section 10(b) of the Securities Exchange Act of 1934 (“1934 Act”))3 of persons and entities that assist in the preparation or dissemination of a separate entity’s prospectus or other public statements for misstatements in such documents.

In a five-to-four decision authored by Justice Thomas, the Court on June 13, 2011 took a narrow approach to the implied private right of action under Rule 10b-5, holding that persons and entities involved in the preparation and dissemination of public statements and filings do not “make” a false statement unless they have “ultimate authority over the [false] statement, including its content and whether and how to communicate it.”4 Accordingly, the Court held that persons and entities lacking such authority cannot be held liable as primary violators of Section 10(b) of the 1934 Act and Rule 10b-5 thereunder.

Although the decision addressed a claim of primary liability against an investment adviser of a registered investment company, the bright-line test the Court endorsed seems certain to narrow the exposure of other service providers, such as attorneys, accountants and adminis-trators, to registered funds and other registrants to private civil actions for securities fraud under Rule 10b-5 relating to their involvement with statements and filings subject to the federal securities laws.