Matthew T. McLaughlin, a partner at Venable, writes that for long over a decade, there has been a lively debate in the Second Circuit courts as to whether “culpable participation” is a necessary element in a control person claim. The debate over what a §20(a) plaintiff must plead may, however, be less animated than originally thought.

Bonnie J. Roe of Cohen & Gresser discusses the timeliness of the SEC’s considering changes to the 500 holder threshold for Exchange Act registration to take account of changes in public and private markets, and weighing whether beneficial rather than record owners should be counted in certain circumstances.

William Sushon and Allen Burton, partners at O’Melveny & Myers, write that in traditional offerings where securities are issued under a standalone registration statement, courts have routinely rejected claims concerning securities a plaintiff did not purchase. Shelf registrations have threatened to erode this bedrock rule. But as the court in In re Wachovia Equity Securities Litigation held, such an expansion of §11 liability runs headlong into Congress’ intent.

Brian S. Fraser and Charles D. Thompson II of Richards Kibbe & Orbe discuss how the SEC’s current review of disclosure requirements applicable to municipal securities is apparently insufficient, and argue for the SEC to push for repeal of the Tower Amendment and for direct regulation of municipal issuers.