On June 13, 2011, the Supreme Court announced its decision in Janus Capital Group, Inc. v. First Derivative Traders. The question in this case was "whether Janus Capital Management LLC (JCM), a mutual fund investment adviser, can be held liable in a private action under Securities and Exchange Commission (SEC) Rule 10b–5 for false statements included in its client mutual funds' prospectuses."
In an opinion delivered by Justice Thomas, the Court held by a vote of 5-4 that because Janus Capital Management did not make the false statements in the prospectuses, it cannot be held liable for those statements. Chief Justice Roberts and Justices Scalia, Kennedy, and Alito joined the opinion of Justice Thomas. Justice Breyer filed a dissenting opinion, which Justices Ginsburg, Sotomayor, and Kagan joined.
To discuss the case, we have Jonathan F. Cohn, who is a partner at Sidley Austin LLP.