In Janus Capital, the Supreme Court established the “ultimate authority” test to determine who may be liable under Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) as a “maker” of a materially misleading statement. Although the Janus holding is generally understood as limiting the reach of Section 10(b), the decision of the U.S. Court of Appeals for the Second Circuit in In re Pfizer Inc. Securities Litigation, No. 14-2853 (2d Cir. Apr. 12, 2016), demonstrates how influence over a statement can potentially render even a non-speaker liable as a “maker” of the statement. The Pfizer Court unanimously vacated a grant of summary judgment in favor of Pfizer and held that a reasonable jury could find Pfizer was the “maker” of allegedly misleading statements, even though the statements were actually delivered to the market by non-Pfizer employees.  The case, which concerned statements made pursuant to a drug co-promotion agreement, demonstrates that a party may be liable under Rule 10b-5 without necessarily having itself directly communicated the challenged statement to the market, and also suggests that Janus’ “ultimate authority” test will not invariably limit liability for a statement to a single “maker.”

View full article, Second Circuit Stresses Control, Not Attribution, In Applying Janus's “Ultimate Authority” Test, And Also Allows Expert Testimony In Support Of An “Inflation-Maintenance” Theory Of Liability