Court Clarifies Standard for Aiding and Abetting in Securities Violations

The Securities and Exchange Commission is authorized to bring civil actions against anyone “that knowingly provides substantial assistance” to a person who commits securities fraud. Thanks to a recent federal court ruling, the agency will have an easier time doing that. From law firm Quinn Emmanuel:

“… the Second Circuit rejected the argument that the SEC is required to plead or prove that an aider and abettor proximately caused the primary securities law violation. Instead, relying on a 75-year-old decision by Judge Learned Hand, the Court stated that once the government proves that a primary violation occurred and that the defendant had knowledge of it, the government need only prove that the defendant associated himself with the fraudulent scheme and sought to make it succeed. This relaxed standard will make it easier for the SEC to pursue enforcement actions against individuals who assist others in committing securities violations.”

Read the update, October 2012: White Collar Litigation Update - Quinn Emanuel Urquhart & Sullivan, LLP»