Accountants, lawyers, financial advisers and other professional advisors to issuers welcomed a June 13, 2011 decision by the U.S. Supreme Court finding that a "maker" of a false statement for purposes of a private action under Rule 10b-5 under the Securities Exchange Act is the person or entity with the ultimate authority over the statement.

The Court's ruling in Janus Capital Group, Inc. v. First Derivative Traders reversed a Fourth Circuit decision finding that a registered investment adviser of mutual funds that had drafted allegedly false and misleading statements in prospectuses disseminated by the adviser had "made" the misleading statements.

The Court found that without ultimate control over the statement, including its content and whether and how to communicate it, the adviser could suggest what to say, but could not "make" the statement for purposes of private actions under Rule 10b-5. Preparing and publishing a statement on behalf of another does not make one a maker of the statement.

The ruling provides better certainty in the securities markets by clarifying who are the proper defendants in private Rule 10b-5 class actions. As a result of this ruling, combined with previous Supreme Court rulings that prohibited aiding and abetting cases against third parties who did not make any misleading public statements, those providing services to issuers, including lawyers, accountants, bankers, financial and investment advisers, may remain subject to SEC actions but will no longer generally be subject to private Rule 10b-5 lawsuits.