Page:Amicus brief - Stoneridge v Scientific-Atlanta - Chamber of Commerce of the United States of America.pdf/36

 27 C. “Scheme” Liability Cannot Be Reconciled With The Elements Of Primary Liability In A § 10(b) Cause Of Action. Central Bank holds: “Any person or entity, including a lawyer, accountant, or bank, who employs a manipulative device or makes a material misstatement (or omission) on which a purchaser or seller of securities relies may be liable as a primary violator under 10b-5, assuming all of the requirements for primary liability under Rule 10b-5 are met.” 511 U.S. at 191 (first emphasis added). As Central Bank describes, the line between private primary liability and aiding-and-abetting requires that the deceptive “device or contrivance” used or employed by the particular defendant itself satisfy all of the requirements for § 10(b) primary liability. A plaintiff cannot mix and match (1) one device or contrivance used or employed by defendant A to satisfy the deception element against defendant A with (2) defendant B’s different device or contrivance to satisfy the other elements of primary liability against defendant A, including reliance. In particular, when a commercial counterparty’s allegedly deceptive conduct or statements to third parties other than investors merely assist, enable, or otherwise cause an issuer’s misstatement, and the reliance, causation, and other elements are satisfied only by the issuer’s misstatement, the defendant has committed only aiding and abetting. See Wright v. Ernst & Young LLP, 152 F.3d 169, 173-76 (2d Cir. 1998) (because investors did not rely on auditor’s false but undisclosed statement to issuer that issuer’s financial results were accurate, auditor’s statement constituted aiding and abetting, not primary liability); Filler v. Hanvit Bank, 156 F. App’x 413, 415-16 (2d Cir. 2005) (summary order) (although banks sent “false loan confirmations” to auditor, investors did not rely on these).