(March 27, 2019) - On March 27, 2019, the
Supreme Court issued its much-anticipated decision in Lorenzo v. SEC, 587 U.S. ____ (2019),
which expands the category of conduct under which a private action
can be brought pursuant to SEC Rule 10b-5.
In Lorenzo, petitioner Frank Lorenzo, the director
of investment banking at a New York broker-dealer, allegedly
violated, inter alia, Rule 10b-5 when he sent two emails to
potential investors describing a debenture offering in the entity
Waste2Energy. Although Lorenzo did not personally prepare the
content of the emails in question (content was purportedly provided
and approved by his boss), Lorenzo allegedly was aware of the fact
that his emails significantly misstated the value of
Waste2Energy's assets.
