Earlier this month, the Second Circuit clarified the U.S. Securities and Exchange Commission’s pleading threshold for claims of aiding and abetting securities laws violations against vendors and other secondary actors. In SEC v. Apuzzo, No. 11-696-cv, 2012 WL 3194303 (2d Cir. Aug. 8, 2012), the Second Circuit (in an opinion authored by District Judge Jed S. Rakoff, sitting on the Second Circuit by designation) clarified that the SEC need not show that a defendant’s conduct was the “proximate cause” of a primary violation of the securities laws or injury to prevail on an aiding and abetting claim. By clarifying the law in a way that makes it easier for the SEC to prevail, the Court widened the already substantial gulf between what is required of the SEC, on the one hand, and private litigants, on the other, in pursuing alleged securities law violations.
View full memo, "Second Circuit Clarifies the SEC’s Pleading Threshold in Bringing Claims Against Aiders and Abettors"