October Term 2018 · Docket 17-1077
Can a supervisor be liable for subordinates' fraud?
The dispute centers on whether a supervisor who directs false statements to investors commits securities fraud.
Verified source milestones
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
the side that brought the case argued that only the maker of a misstatement can be liable.
The SEC argued that directing false statements constitutes quintessential securities fraud.
justice_questions
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 10, lines 34-36 — Transcript, file page 10, lines 34-36
- Official Supreme Court Transcript — file page 11, lines 33-6 — Transcript, file page 11, lines 33-6
- Official Supreme Court Transcript — file page 11, lines 6-18 — Transcript, file page 11, lines 6-18
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
- Official Supreme Court Transcript — file page 4, lines 8-15 — Transcript, file page 4, lines 8-15
- Official Supreme Court Transcript — file page 5, lines 22-23 — Transcript, file page 5, lines 22-23
- Official Supreme Court Transcript — file page 5, lines 26-26 — Transcript, file page 5, lines 26-26
- Official Supreme Court Transcript — file page 5, lines 30-18 — Transcript, file page 5, lines 30-18
- Official Supreme Court Transcript — file page 6, lines 33-15 — Transcript, file page 6, lines 33-15
- Official Supreme Court Transcript — file page 7, lines 26-30 — Transcript, file page 7, lines 26-30
- Official Supreme Court Transcript — file page 8, lines 10-27 — Transcript, file page 8, lines 10-27
- Official Supreme Court Transcript — file page 8, lines 31-31 — Transcript, file page 8, lines 31-31
- Official Supreme Court Transcript — file page 9, lines 34-18 — Transcript, file page 9, lines 34-18
- Official Supreme Court Transcript — file page 9, lines 6-18 — Transcript, file page 9, lines 6-18
A citizen's guide to the whole case
What this case is about
The case tests the scope of liability under federal securities laws for supervisors who do not personally author fraudulent documents.
Official sources for this section
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
How the case got here
The Supreme Court heard oral argument in this case on December 3, 2018.
Official sources for this section
- Official Supreme Court Transcript — file page 4, lines 8-15 — Transcript, file page 4, lines 8-15
What each side wants
the side that brought the case seeks dismissal of the fraud charges.
The SEC seeks to hold the side that brought the case liable for the fraud.
Official sources for this section
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
What each side says
the side that brought the case argues only the person who creates a misstatement can be liable.
The SEC argues a supervisor who directs false statements commits fraud.
Official sources for this section
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
What the justices asked
Justice Kagan asked if the same logic applies to other statutory sections.
Justice Ginsburg noted the email began with a summary of key points.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 34-36 — Transcript, file page 10, lines 34-36
- Official Supreme Court Transcript — file page 11, lines 33-6 — Transcript, file page 11, lines 33-6
- Official Supreme Court Transcript — file page 11, lines 6-18 — Transcript, file page 11, lines 6-18
- Official Supreme Court Transcript — file page 5, lines 22-23 — Transcript, file page 5, lines 22-23
- Official Supreme Court Transcript — file page 5, lines 26-26 — Transcript, file page 5, lines 26-26
- Official Supreme Court Transcript — file page 5, lines 30-18 — Transcript, file page 5, lines 30-18
- Official Supreme Court Transcript — file page 6, lines 33-15 — Transcript, file page 6, lines 33-15
- Official Supreme Court Transcript — file page 7, lines 26-30 — Transcript, file page 7, lines 26-30
- Official Supreme Court Transcript — file page 8, lines 10-27 — Transcript, file page 8, lines 10-27
- Official Supreme Court Transcript — file page 8, lines 31-31 — Transcript, file page 8, lines 31-31
- Official Supreme Court Transcript — file page 9, lines 34-18 — Transcript, file page 9, lines 34-18
- Official Supreme Court Transcript — file page 9, lines 6-18 — Transcript, file page 9, lines 6-18
Why it matters
This case defines who bears legal responsibility for corporate fraud. It clarifies the duties of supervisors in financial markets. Investors rely on accurate information from company leaders. Clear rules protect market integrity and public trust.
Official sources for this section
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 34-36 — Transcript, file page 10, lines 34-36
- Official Supreme Court Transcript — file page 11, lines 33-6 — Transcript, file page 11, lines 33-6
- Official Supreme Court Transcript — file page 11, lines 6-18 — Transcript, file page 11, lines 6-18
- Official Supreme Court Transcript — file page 4, lines 8-15 — Transcript, file page 4, lines 8-15
- Official Supreme Court Transcript — file page 5, lines 22-23 — Transcript, file page 5, lines 22-23
- Official Supreme Court Transcript — file page 5, lines 26-26 — Transcript, file page 5, lines 26-26
- Official Supreme Court Transcript — file page 5, lines 30-18 — Transcript, file page 5, lines 30-18
- Official Supreme Court Transcript — file page 6, lines 33-15 — Transcript, file page 6, lines 33-15
- Official Supreme Court Transcript — file page 7, lines 26-30 — Transcript, file page 7, lines 26-30
- Official Supreme Court Transcript — file page 8, lines 10-27 — Transcript, file page 8, lines 10-27
- Official Supreme Court Transcript — file page 8, lines 31-31 — Transcript, file page 8, lines 31-31
- Official Supreme Court Transcript — file page 9, lines 34-18 — Transcript, file page 9, lines 34-18
- Official Supreme Court Transcript — file page 9, lines 6-18 — Transcript, file page 9, lines 6-18
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
- Official Supreme Court Transcript — file page 30, lines 20-33 — Transcript, file page 30, lines 20-33
- Official Supreme Court Transcript — file page 4, lines 16-21 — Transcript, file page 4, lines 16-21
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.