The private right of action under §10(b) of the Securities Exchange Act of 1934 does not extend to aiders and abettors. Because the conduct of a secondary actor must therefore satisfy each of the elements for §10(b) liability, the plaintiff must prove reliance upon a material misrepresentation or omission by the defendant.
Stoneridge Investment Partners v. Scientific-Atlanta, 552 U.S. 148 (2008), was a decision by the United States Supreme Court pertaining to the scope of liability of secondary actors, such as lawyers and accountants, for securities fraud under the Securities Exchange Act of 1934. In a 5-3 decision authored by Justice Anthony M. Kennedy, the Court held that "aiders and abettors" of fraud cannot be held secondarily liable under the private right of action authorized by §10(b) of the Exchange Act. Such defendants can only be held liable if their own conduct satisfies each of the elements for §10(b) liability. Therefore, the plaintiff must prove reliance, in making a decision to acquire or hold a security, upon a material misrepresentation or omission by the defendant.
Walter, David (2008). "Developments in US Securities Litigation: The Decision in Stoneridge Investment Partners v Scientific-Atlanta". Journal of International Banking Law. 23 (5): 267–270. ISSN0267-937X.
