AND · 15usc78j:statement
Under Janus, the Rule 10b-5(b) maker must have ultimate authority over content and whether/how to communicate the statement; drafting assistance alone is insufficient. Rule 10b-5(b) requires a false statement or omission that makes statements actually made misleading. Macquarie (2024) excludes pure omissions even when Item 303 requires disclosure. Do not turn every duty to disclose into a 10b-5(b) private claim; older broad omission phrasing in the cited 2019 opinions is bounded by that holding.
Exact element source
any manipulative or deceptive device or contrivanceSource:
docroot/ir/usc/title15.jsonl#title15_sec78j; Unicode character offsets [907:958] (end exclusive); SHA-256 8ceaded2a57e5b49e22a4766033c8899ebfd730667700a031b8db7f80ea91e32.Routes and case patterns
| Route | Definition | Merits instance blocks | Distinct merits cases | Examples (up to 3 cases per count group) |
|---|---|---|---|---|
| Unclassified route provisional; provisional (1 case) | no definition yet | 0 Satisfied 0; not satisfied 0; excluded context 1 | 0 | Used only in non-merits blocks (1). Excluded context examples:Mun. Employees' Ret. Sys. of Mich. v. Pier 1 Imports, Inc. — 935 F.3d 424 (2019) · United States Court of Appeals for the Fifth Circuit · 2019 — not reached · basis not recorded (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) · applied/merits · not counted |
| falsity-of-existing-fact provisional; 2 observed cases | Whether a representation of present or past fact was untrue. | 2 Satisfied 2; not satisfied 0; excluded context 0 | 2 | Sec. & Exch. Comm'n v. Sethi — 910 F.3d 198 (2018) · United States Court of Appeals for the Fifth Circuit · 2018 — satisfied · conceded (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) · applied/merits · counted Xia Bi v. McAuliffe — 927 F.3d 177 (2019) · United States Court of Appeals for the Fourth Circuit · 2019 — satisfied · pleaded (15usc78j: author: Astra2 · not independently reviewed) · applied/merits · counted |
| maker provisional; provisional (1 case) | Whether the defendant is the "maker" of the statement, i.e. had ultimate authority over it (Janus). | 1 Satisfied 0; not satisfied 1; excluded context 0 | 1 | Janus Capital Group, Inc. v. First Derivative Traders — 564 U.S. 135 (2011) · Supreme Court of the United States · 2011 — not · pleaded (15usc78j: author: Astra2 · QA: PASS (QA2, neov2/qa/wave2-cases-QA2-crosscheck.md)) · applied/merits · counted |
| omission-and-duty-to-disclose provisional; provisional (1 case) | Whether silence is actionable: a duty to disclose, or an omission that makes what was said misleading. | 1 Satisfied 0; not satisfied 1; excluded context 0 | 1 | Fries v. N. Oil & Gas, Inc. — 354 F. Supp. 3d 384 (2018) · United States District Court for the Southern District of New York · 2018 — not · pleaded (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) · applied/merits · counted |
How courts decided this element
| Case | Element | Holding and scope | Pattern | Exact source quotations |
|---|---|---|---|---|
| Fries v. N. Oil & Gas, Inc. — 354 F. Supp. 3d 384 (2018) · United States District Court for the Southern District of New York · 2018 — not · pleaded (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) | Materially false statement or misleading half-truth | not Counted merits instance applied / merits basis: pleaded; party: Northern Oil and Gas, Inc. and officers; count: class action securities fraud; subject: party=Northern Oil and Gas, Inc. and officers; count=class action securities fraud District court holds Northern Oil had no duty to disclose its own uncharged, unadjudicated wrongdoing merely because its 10-Qs acknowledged the SEC investigation of Dakota Plains: the filings were literally true, did not deny illegal conduct, and stated no misleading opinion. The Code-of-Ethics and CEO-praise theories were rejected again for the reasons given in the earlier opinion (285 F.Supp.3d 706). | 10-Q acknowledges an SEC investigation of an affiliate and says the company is not its focus; company's own uncharged involvement not disclosed | Based on the information available to it, the Company does not believe that it, or any conduct by the Company, is the focus of any investigation by a governmental agency regarding this matter.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [14479:14671] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025.Second, Defendants knowingly used Northern's staff, space, and resources to help Reger and Dakota Plains, including by facilitating some of Reger and Dakota Plains's misconduct.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [1713:1890] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025.The SEC indeed was not investigating Northern Oil.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [18048:18098] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025.The failure to disclose material information does not amount to an actionable misrepresentation, absent a duty to disclose.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [10908:11031] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025.A reasonable investor would not understand the fact the SEC is not investigating Northern Oil to mean that Northern Oil did not do anything wrong.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [18467:18613] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025.Consequently, as it did for the FAC, the Court finds that Plaintiff fails to allege an actionable misstatement or omission by Defendants.Source: docroot/ir/caselaw/f_supp_3d_354.jsonl#/f-supp-3d/354/0384-01; Unicode character offsets [20025:20162] (end exclusive); SHA-256 d8d593f40b5d3d74147b50a31be364b6df5222a657bfefcc659f4913a5ce5025. |
| Sec. & Exch. Comm'n v. Sethi — 910 F.3d 198 (2018) · United States Court of Appeals for the Fifth Circuit · 2018 — satisfied · conceded (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) | Materially false statement or misleading half-truth | satisfied Counted merits instance applied / merits basis: conceded; party: Sameer P. Sethi; count: SEC enforcement action; subject: party=Sameer P. Sethi; count=SEC enforcement action Fifth Circuit affirms that cold-call scripts and offering documents representing existing relationships with major oil companies such as Exxon Mobil and Conoco Phillips were misstatements: the SEC's evidence that no such relationship existed was unrebutted. | promoter's cold-call script and offering documents claim existing partnerships with major oil companies that never existed | The script also claimed that the venture was "working DIRECTLY with these major companies."Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [16306:16397] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb.One investor declared that Sethi told him that "Sethi Petroleum was partnering with Exxon Mobil and other major oil companies to drill and operate."Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [16432:16580] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb.Nor does the record show that the venture ever partnered with Exxon Mobil, Conoco Phillips, or a similar company.Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [17845:17958] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb.And while Oxy USA is a subsidiary of Occidental Petroleum, a major oil company, Sethi offers no evidence about whether and to what extent Occidental Petroleum was involved in the well operation.Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [18426:18620] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb.Under Rule 10b-5, a defendant makes a misrepresentation when "the information disclosed, understood as a whole, would mislead a reasonable potential investor."Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [14327:14486] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb.The district court correctly concluded that these facts constitute a misstatement.Source: docroot/ir/caselaw/f3d_910.jsonl#/f3d/910/0198-01; Unicode character offsets [18722:18804] (end exclusive); SHA-256 e8add011aab0c14da59ab058882ae81369f40e87fe60a91e5b323815e6b634eb. |
| Xia Bi v. McAuliffe — 927 F.3d 177 (2019) · United States Court of Appeals for the Fourth Circuit · 2019 — satisfied · pleaded (15usc78j: author: Astra2 · not independently reviewed) | Materially false statement or misleading half-truth | satisfied Counted merits instance applied / merits basis: pleaded; party: McAuliffe and Rodham; count: federal securities fraud; subject: party=McAuliffe and Rodham; count=federal securities fraud Sales, employees, existing capital, and a claimed agreement with Denmark describe ascertainable existing facts. This block records rejection of the puffery/forward-looking characterization, not success on the whole claim. | existing-fact/vehicle-sales-and-committed-purchaser | (1) On April 25, 2011, Rodham claimed that EB-5 funds accounted for only 7.8% of GreenTech's capital during an event in Beijing, China.Source: docroot/ir/caselaw/f3d_927.jsonl#/f3d/927/0177-01; Unicode character offsets [3945:4080] (end exclusive); SHA-256 eb5a1012c116a662efd3d60680f34148884a918bf8c5a992ebc21edab2bdb014.(1) On November 11, 2011, McAuliffe told a CNBC interviewer that GreenTech "ha[d] only sold 11,000 cars, but it's still a new business for us." J.A. 154.Source: docroot/ir/caselaw/f3d_927.jsonl#/f3d/927/0177-01; Unicode character offsets [4482:4635] (end exclusive); SHA-256 eb5a1012c116a662efd3d60680f34148884a918bf8c5a992ebc21edab2bdb014.The complaint alleges that each of those statements was false when made because GreenTech (1) had not sold 11,000 cars; (2) did not have a contract with Denmark; (3) had not mass-produced any electric vehicles; and (4) had fewer than one hundred employees.Source: docroot/ir/caselaw/f3d_927.jsonl#/f3d/927/0177-01; Unicode character offsets [5115:5371] (end exclusive); SHA-256 eb5a1012c116a662efd3d60680f34148884a918bf8c5a992ebc21edab2bdb014.The problem for defendants, however, is that their alleged misstatements go beyond mere projections or puffery.Source: docroot/ir/caselaw/f3d_927.jsonl#/f3d/927/0177-01; Unicode character offsets [15316:15427] (end exclusive); SHA-256 eb5a1012c116a662efd3d60680f34148884a918bf8c5a992ebc21edab2bdb014.Plaintiffs' allegation thus counts as an assertion of fact under the case law in this circuit.Source: docroot/ir/caselaw/f3d_927.jsonl#/f3d/927/0177-01; Unicode character offsets [16441:16535] (end exclusive); SHA-256 eb5a1012c116a662efd3d60680f34148884a918bf8c5a992ebc21edab2bdb014. |
| Mun. Employees' Ret. Sys. of Mich. v. Pier 1 Imports, Inc. — 935 F.3d 424 (2019) · United States Court of Appeals for the Fifth Circuit · 2019 — not reached (15usc78j: author: Flash3 · QA: FIX (Fable, neov2/cases/TRIAGE-Flash.md)) | Materially false statement or misleading half-truth | not_reached Excluded from merits counts applied / merits party: Pier 1 Imports, Inc. and executives Smith and Turner; count: class action securities fraud; subject: party=Pier 1 Imports, Inc. and executives Smith and Turner; count=class action securities fraud The court expressly abstains from reaching the alternative ground of whether the complaint alleged actionable misrepresentations. | Unspecified route | Because we conclude that the investors' scienter allegations are inadequate, we do not reach this issue.Source: docroot/ir/caselaw/f3d_935.jsonl#/f3d/935/0424-01; Unicode character offsets [34380:34484] (end exclusive); SHA-256 09f049bca943d33f2233ef7af09b9b1a334fdf0d415fbcc62dce240451a67170. |
| Janus Capital Group, Inc. v. First Derivative Traders — 564 U.S. 135 (2011) · Supreme Court of the United States · 2011 — not · pleaded (15usc78j: author: Astra2 · QA: PASS (QA2, neov2/qa/wave2-cases-QA2-crosscheck.md)) | Materially false statement or misleading half-truth | not Counted merits instance applied / merits basis: pleaded; party: Janus Capital Management LLC; theory: Rule 10b-5(b) ultimate authority; subject: party=Janus Capital Management LLC; theory=Rule 10b-5(b) ultimate authority Preparation and affiliated management supplied influence, but the legally separate fund retained ultimate control. No conclusion on every other fraud element follows from dismissal on maker status. | statement-maker/independent-fund-adviser | 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.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [590:946] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.Although JCG created Janus Investment Fund, Janus Investment Fund is a separate legal entity owned entirely by mutual fund investors.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [947:1080] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.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.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [1395:1592] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.There is no allegation that JCM in fact filed the prospectuses and falsely attributed them to Janus Investment Fund.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [14412:14528] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.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.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [7684:7865] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.But this assistance, subject to the ultimate control of Janus Investment Fund, does not mean that JCM “made” any statements in the prospectuses.Source: docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [14939:15083] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9. |
Court interpretations
interpretation
Rather, absent a duty, material information needn't be disclosed unless its omission would render misleading other information that an issuer has disclosed.
Carvelli v. Ocwen Fin. Corp. — 934 F.3d 1307 · United States Court of Appeals for the Eleventh Circuit · 2019 (15usc78j: author: unavailable · not independently reviewed)
Rather, absent a duty, material information needn't be disclosed unless its omission would render misleading other information that an issuer has disclosed.Source:
docroot/ir/caselaw/f3d_934.jsonl#/f3d/934/1307-01; Unicode character offsets [14508:14664] (end exclusive); SHA-256 163ed4472ed85b4e6b4dfef6442cec2c05fd4b4d6ce3587bfabbd6a8244b6f91.Under Janus, the Rule 10b-5(b) maker must have ultimate authority over content and whether/how to communicate the statement; drafting assistance alone is insufficient. Rule 10b-5(b) requires a false statement or omission that makes statements actually made misleading. Macquarie (2024) excludes pure omissions even when Item 303 requires disclosure. Do not turn every duty to disclose into a 10b-5(b) private claim; older broad omission phrasing in the cited 2019 opinions is bounded by that holding.
interpretation
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.
Janus Capital Group, Inc. v. First Derivative Traders — 564 U.S. 135 (2011) · Supreme Court of the United States · 2011 (15usc78j: author: Astra2 · QA: PASS (QA2, neov2/qa/wave2-cases-QA2-crosscheck.md))
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.Source:
docroot/ir/caselaw/us_564.jsonl#/us/564/0135-01; Unicode character offsets [7684:7865] (end exclusive); SHA-256 73a3ba3854ec054a40c5b6756058bf95612e9c24c9016613a6ce2738c696ecd9.Under Janus, the Rule 10b-5(b) maker must have ultimate authority over content and whether/how to communicate the statement; drafting assistance alone is insufficient. Rule 10b-5(b) requires a false statement or omission that makes statements actually made misleading. Macquarie (2024) excludes pure omissions even when Item 303 requires disclosure. Do not turn every duty to disclose into a 10b-5(b) private claim; older broad omission phrasing in the cited 2019 opinions is bounded by that holding.