The Second Circuit Confirms The Strict “Attribution” Test For Section 10(b) Liability For Secondary Actors

The below memo discusses the Second Circuit’s April 27, 2010 decision in Pacific Investment Management Co. LLC (“PIMCO”) v. Mayer Brown LLP, which held that a secondary actor can be held liable in a private damages action under Section 10(b) of the Exchange Act only for false statements “attributed” to the secondary-actor defendant at the time of dissemination. In so holding, the Court of Appeals clarified its inconsistent prior precedents, and rejected a more relaxed standard for secondary actor liability advanced both by the plaintiffs and the SEC as an amicus.