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Business Crimes BulletinFeaturesRegulationSecurities LitigationWhite Collar Crime

Rule 10b-5 Liability: The Second Circuit and 'Rio Tinto'

By Anthony Michael Sabino
June 01, 2023

In the first two installments, I exposited Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011), and Lorenzo v. S.E.C., 587 U.S. ___, 139 S. Ct. 1094 (2019), respectively, both essential to understanding S.E.C. v. Rio Tinto PLC, 41 F.4th 47 (2d Cir. 2022), the U.S. Court of Appeals for the Second Circuit's most recent holding regarding Rule 10b-5 "scheme" liability. See, 17 C.F.R. §240.10b-5.

Now we examine how the "Mother Court" of federal securities law has tended to that branch of the mighty judicial oak rooted in that venerable regulation. See, Morrison v. National Australia Bank Ltd., 561 U.S. 247, 276 (2010) (Stevens, J., concurring).

Rio Tinto, a global titan in metals and mining, was founded in 1873. Notwithstanding its distinctly Anglo-Australian heritage, its name is derived from the site of its original mining operation in Spain. In early 2011, the corporation paid $3.7 billion to acquire a coal mine in Mozambique.

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