Investment banker does not have to draft fraudulent communication to be held liable for fraud, finds Supreme Court

By

The US Supreme Court ruled Wednesday that an investment banker may be held liable under 17 CFR § 240.10b-5 (Rule 10b-5) for sending fraudulent information about a potential investment even if the employee did not draft the correspondence and sent it at the behest of their boss.

In Lorenzo v. Securities and Exchange Commission the court considered of whether Lorenzo, then a director of investment banking at a brokerage firm, committed fraud when, at the request of his boss, he sent two emails to clients about an investment opportunity at a company with assets of $10 million. Lorenzo knew the real valuation of the company's assets was closer to $400,000. Lorenzo copied and pasted the information from his boss and sent the emails anyway.

Full Article

Join the Discussion
More Law & Society
Texas Cops Accused of 'Inappropriate Acts' with Suspected Prostitutes While

Texas Cops Accused of 'Inappropriate Acts' with Suspected Prostitutes While Posing as Clients: 'Embarrassing and Disappointing'

Joseph Smith

Alabama Death Row Inmate's Fate Uncertain As SCOTUS Demands Court Make 2nd Ruling

New York Lawmaker Seeks Justice for Influencer Squirrel with 'Peanut's

New York Lawmaker Seeks Justice for Influencer Squirrel with 'Peanut's Law,' Calls for Launch of 'Thorough Investigation'

Wayne Streeter, 24, and Alana Cagle, 18

Hatchet-Wielding Florida Couple Slashed Man Who Agreed To Be Tied Up, 'Have Sex' On Beach: Police

Real Time Analytics