Page:Amicus brief - Stoneridge v Scientific-Atlanta - Chamber of Commerce of the United States of America.pdf/13

4 Petitioner, its amici, and lower courts have proposed an array of “scheme” liability standards, all of which share three common threads: the use of verbs that are synonymous with aiding and abetting or conspiracy; the intervening steps between the defendant’s conduct and the issuer’s statements that harmed the plaintiff; and the complete absence of a workable limiting principle. By contrast, the test this Court has repeatedly announced for § 10(b) liability for conduct— the existence of a duty to disclose by the specific defendant— has well-established contours and a fixed relationship to the existing elements of the private right of action. A. Like Aiding-And-Abetting, “Scheme” Liability Is Derivative Of The Issuer’s Conduct. Petitioner asks this Court to find liability where defendants engaged in their own deceptive conduct in transactions with a public corporation for the purpose and effect of creating a false appearance of material fact that enabled the publication of artificially inflated financial statements by the public corporation. Pet. Br. at i (emphases added). “Scheme” liability for a nonspeaking defendant, like aiding-and-abetting, is purely derivative from the issuer’s statements. Consider the words used by petitioner and amici to describe the conduct giving rise to “scheme” liability: “causing false financial statements to be published,” id. at 22; see also id. at 30; Ark. Br. at 13, 14, “furthering the fraudulent scheme,” Pet. Br. at 14, “participation” in a “scheme,” id. at 14, 15, and “conspir[ing]” or “inducing” wrongdoing by the issuer, Prof. Adams Br. at 11, 17. These are simply ways of saying “aiding and abetting” or “conspiring” without using those words. See Central Bank, 511 U.S. at 181, 184 (“substantial assistance” or “knowing participation”); 15 U.S.C. § 78t(e). See also Salinas v. United States, 522 U.S. 52, 65 (1997) (conspiracy requires “adopt[ing] the goal of furthering or facilitating the criminal endeavor”). “Allegations of