Page:Francis V. Lorenzo v. Securities and Exchange Commission.pdf/20

2 explained that he wanted the e-mails to come from the firm’s investment-banking division, which Lorenzo directed. Lorenzo promptly addressed an e-mail to each client, “cut and pasted” the contents of each e-mail—which he received from the owner—into the body, and “sent [them] out.” App. 321. It is undisputed that Lorenzo did not draft the e-mails’ contents, though he knew that they contained false or misleading statements regarding the debenture offering. Both e-mails stated that they were sent “[a]t the request of” the owner of the firm. Id., at 403, 405. No other allegedly fraudulent conduct is at issue.

In 2013, the SEC brought enforcement proceedings against the owner of the firm, the firm itself, and Lorenzo. Even though Lorenzo sent the e-mails at the owner’s request, the SEC did not charge Lorenzo with aiding and abetting fraud committed by the owner. See 15 U. S. C. §§ 77o(b), 78o(b)(4)(E), 78t(e). Instead, the SEC charged Lorenzo as a primary violator of multiple securities laws, including Rule 10b–5(b), which prohibits “mak[ing] any untrue statement of a material fact… in connection with the purchase or sale of any security.” 17 CFR §240.10b–5(b) (2018); see Ernst & Ernst v. Hochfelder, 425 U. S. 185, 212–214 (1976) (construing Rule 10b–5(b) to require scienter). The SEC ultimately concluded that, by “knowingly sen[ding] materially misleading language from his own email account to prospective investors,” App. to Pet. for Cert. 77, Lorenzo violated Rule 10b–5(b) and several other antifraud provisions of the securities laws. The SEC “barred [him] from serving in the securities industry” for life. Id., at 91.

The Court of Appeals unanimously rejected the SEC’s determination that Lorenzo violated Rule 10b–5(b).