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Historically, federal courts generally agreed that scheme liability under SEC Rule 10b-5(a) and (c) requires something more than a misstatement or omission — with misstatements and omissions typically being litigated under Rule 10b-5(b) instead. The U.S. Supreme Court in Lorenzo v. SEC, 139 S. Ct. 1094 (2019), however, held that an individual who disseminates a misstatement, without other fraudulent conduct, is potentially liable under the scheme liability provisions of Rule 10b-5. Subsequently, a circuit split has emerged over the scope of Lorenzo’s holding, which reflects a fundamental disagreement about the relationship between scheme liability and Rule 10b-5(b).
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By Peter Collins
It is imperative that every organization acknowledges and takes seriously the potential harm that can be caused by insiders who misuse AI as a weapon for personal gain or to settle scores.
By Elkan Abramowitz and Jonathan Sack
This article analyzes the Second Circuit’s decision, which rejected the defense’s arguments for narrowing the definition of “corruptly” and a “thing of value” in the context of Section 215(a)(2).
By Sarah Heaton Concannon and Alexander Schwartz
This article identifies certain information asymmetries in the SEC’s beneficial ownership reporting rules, discusses the extent to which those information asymmetries are addressed (or not) under the SEC’s recent rule amendments, and considers whether additional rule amendments or SEC guidance continue to be necessary.
By Maydeen Merino
Artificial intelligence could drive greater efficiency and lower costs in the finance sector but U.S. Securities and Exchange Commission Chair Gary Gensler warned last month about companies potentially making false claims about using the technology, a nefarious practice known as “AI washing.”