On July 15, 2022, the U.S. Court of Appeals for the Second Circuit issued an opinion in SEC v. Rio Tinto plc, — F.4th —-, 2022 WL 2760323 (2d Cir. 2022), ruling that claims under Rule 10b-5(a) and (c) (“scheme liability claims”) may not be based on allegations of misstatements and omissions alone. In doing so, the Second Circuit affirmed that its holding in Lentell v. Merrill Lynch & Co., 396 F.3d 161 (2d Cir. 2005) remains good law after Lorenzo v. SEC, 139 S. Ct. 1094 (2019).

In the unanimous opinion, Judge Dennis Jacobs, joined by Judges Richard Wesley and William Nardini, rejected the SEC’s view that Lorenzo expanded the scope of scheme liability to encompass actions based solely on alleged misrepresentations and omissions and reaffirmed its prior holding in Lentell, finding that “misstatements and omissions can form part of a scheme liability claim, but an actionable scheme liability claim also requires something beyond misstatements and omissions, such as dissemination.” SEC v. Rio Tinto plc, — F.4th —, 2022 WL 2760323, *1 (2d Cir. 2022).

The Securities Exchange Act and Rule 10b-5

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