10th Circ.'s Securities Fraud Reading May Be Too Broad

Partner Peter Morrison, counsel Virginia Milstead and associate Raza Rasheed review the U.S. Court of Appeals for the Tenth Circuit's ruling in Malouf v. SEC, which held that the defendant could be liable under SEC Rules 10b-5(a) and (c) for knowingly failing to correct another party’s material misstatements in connection with a securities transaction. The decision is the first by a circuit court to apply the U.S. Supreme Court’s recent decision in Lorenzo v. SEC.