While the outcome of the Janus Capital case is still unknown, if the Court does in fact uphold the Fourth Circuit’s opinion the implications could be varied. Some commentators have predicted a deluge of securities class action suits against the spectrum of actors who may be affiliated with a fraudulent prospectus. Still, others have argued that the Fourth Circuit’s opinion addresses only actors who took a direct role in the fraud by both drafting and disseminating allegedly fraudulent materials. The truth on this matter is anyone’s guess. At least one thing is true, however. The question of whether there will be a significant expansion of liability under the securities fraud laws, and, therefore, a substantial expansion of the securities class action universe could be decided in December 2010.
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