SIFMA Submits Amicus Brief to U.S. Court of Appeals in the Household International Case

SIFMA submitted an amicus brief to the U.S. Court of Appeals in support of Household International Group ("defendant") regarding the Glickenhaus Institutional Group's ("plaintiff's") attempt to expand implied private action under Exchange Act Section 10(b) ("Manipulative and Deceptive Devices") by diluting "the requirement of loss causation" and extending liability to secondary actors who did not "make" actionable statements. SIFMA explained that the plaintiff's actions are impermissible, stating that it submitted the brief because the court's decision cannot be reconciled with the Supreme Court's decisions on loss causation or secondary liability. The brief argued that, first, with regard to loss causation, the Supreme Court has recognized the requirement of loss causation is necessary to ensure that the judicially created private right of action does not become a form of "broad insurance against market losses." Additionally, in dealing with secondary liability, the brief reasoned that the Supreme Court has set a precedent that "extending liability to secondary actors would impose tremendous costs and would have significant 'ripple effects' detrimental to issuers and investors alike."

See: SIFMA Amicus Curie Brief.