Janus Capital Group, Inc. v. First Derivative Traders

Facts

1. 3 Materially false statement or misleading half-truth not pleaded

   Janus Capital Group, Inc. (JCG), is a publicly traded company that created the Janus family of mutual funds. These mutual funds are organized in a Massachusetts business trust, the Janus Investment Fund. Janus Investment Fund retained JCG’s wholly owned subsidiary, JCM, to be its investment adviser and administrator. JCG and JCM are the petitioners here.

2. 3 Materially false statement or misleading half-truth not pleaded

   Although JCG created Janus Investment Fund, Janus Investment Fund is a separate legal entity owned entirely by mutual fund investors.

3. 3 Materially false statement or misleading half-truth not pleaded

   At all times relevant to this case, all of the officers of Janus Investment Fund were also officers of JCM, but only one member of Janus Investment Fund’s board of trustees was associated with JCM.

4. 3 Materially false statement or misleading half-truth not pleaded

   For purposes of Rule 10b-5, the maker of a statement is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.

5. 3 Materially false statement or misleading half-truth not pleaded

   There is no allegation that JCM in fact filed the prospectuses and falsely attributed them to Janus Investment Fund.

6. 3 Materially false statement or misleading half-truth not pleaded

   But this assistance, subject to the ultimate control of Janus Investment Fund, does not mean that JCM “made” any statements in the prospectuses.