SECONDARY LIABILITY UNDER RULE-B-10-5 - STILL ALIVE AND WELL AFTER CENTRAL-BANK

Although the U.S. Supreme Court in Central Bank of Denver, N.A. v. Fir st Interstate Bank, N.A. held that there is no aiding and abetting Lia bility in a private action under Rule 10b-5, it recognized that second ary actors are still subject to liability for primary violations. Sinc e Central Bank, numerous lower courts have struggled with the issue of when the conduct of secondary actors (such as accountants, underwrite rs, and lawyers) gives rise to primary as opposed to aiding and abetti ng liability. Some courts have imposed primary liability on secondary actors for assisting in the preparation of statements that are alleged to contain misrepresentations or omissions. Other courts have held th at the same conduct is merely aiding and abetting,This Article analyze s the approaches courts have taken to the scope of primary liability f ollowing Central Bank and discusses whether they are consistent with t he U.S. Supreme Court's reasoning.