This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
According to Robert Heim, on behalf of the Petitioner, the petitioner argues that Frank Lorenzo was not the maker of the statements at issue under Section 10(b) and Rule 10b‑5.
According to Robert Heim, on behalf of the Petitioner, the petitioner relies on Janus Capital, which held that only the maker of a misstatement can be liable for that misstatement.
Background and question before the Court
According to Robert Heim, on behalf of the Petitioner, the Court must decide whether Lorenzo is the “maker” of the statements at issue under Section 10(b) and Rule 10b‑5.
According to Robert Heim, on behalf of the Petitioner, the petitioner argues that imposing liability under Rule 10b‑5(a), (c) and 17(a) would sidestep the Janus holding and its limitations on misstatement liability.
What each side argues
Petitioner (Frank Lorenzo)
According to Robert Heim, on behalf of the Petitioner, imposing liability under Rule 10b‑5(a), (c) and 17(a) would sidestep the Janus holding.
What happened at oral argument
Justice Sotomayor asked whether Janus was a private cause of action.
Justice Ginsburg asked whether Lorenzo knew the company was worthless at the time the email was sent.
Justice Breyer asked what “fraud” means, i.e., creating a false material belief in the mind of the recipient.
Justice Breyer also asked whether there is a distinction between conduct and statement.
What the Court decided
Why it matters
Expanding liability could tear a loophole in securities‑fraud law, producing a damaging result for the SEC that Congress likely did not intend.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- f60c34030615096c74bf-r1-9a3474b91db94aab.pdforal argument transcript
Guide generated September 26, 2026. Automated validation accepted this version.