Stoneridge, agency principles and the future of 10b-5 liability

 

　

This paper analyses the Supreme Court’s recent Stoneridge decision and its implications for future securities litigation. Some have argued that Stoneridge portends the end of liability based on respondeat superior or other agency principles. This paper argues that Stoneridge may result in narrowing liability against multinational accounting firms and other secondary actors whose liability is based solely on their status as principals of other entities that are alleged to have violated 10(b) as their agents. Yet the paradigmatic case of agency principles, an issuing corporation held liable based on fraudulent misstatements by its employee agents, is unlikely to be altered in any significant way.

 

securities litigation, securities law, 10b-5, Stonebridge, agency, respondeat superior