SECURITIES | 2026-10-21

The Janus “Maker” Rule: Who Can Be Held Primarily Liable for a False Statement Under Rule 10b-5 — and Why It Matters for California Investors and Corporate Advisers

Under the Supreme Court’s decision in Janus Capital Group v. First Derivative Traders, only the person with “ultimate authority” over a statement “makes” it for purposes of a private Rule 10b-5(b) claim. This single rule decides whether an adviser, a parent company, a lawyer, or an executive can be sued directly for a misstatement — or only, at most, as an aider and abettor the SEC can reach but private plaintiffs cannot.

One of the most consequential questions in a securities-fraud case is deceptively simple: who actually “made” the false statement? The answer decides who a private investor can sue for the misrepresentation itself. In Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011) , the U

Securities-fraud litigation under Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5 turns on a set of demanding elements — a material misrepresentation or omission, scienter, reliance, loss causation, and damages. But before any of those elements is reached, a threshold question often decides the case: against whom can a private plaintiff bring the claim at all? The Supreme Court’s decision in Janus drew a sharp line around primary liability for false statements, and that line continues to shape which defendants face private suits in California and nationwide. For investors deciding whom to sue, and for advisers, parents, executives, lawyers, and accountants assessing their own exposure, the Janus “maker” rule is foundational.

The Statutory and Regulatory Framework

Section 10(b) of the Securities Exchange Act of 1934 makes it unlawful to use a manipulative or deceptive device in connection with the purchase or sale of a security, in contravention of SEC rules. The implementing rule, Rule 10b-5 (17 C.F.R. § 240.10b-5), has three subparts: subpart (a) bars employing any device, scheme, or artifice to defraud; subpart (b) bars making any untrue statement of a material fact or omitting a material fact necessary to make statements not misleading; and subpart (c) bars engaging in any act, practice, or course of business that operates as a fraud or deceit. The private right of action under Section 10(b) and Rule 10b-5 is implied — not written into the statute — and the Supreme Court has repeatedly cautioned against expanding it beyond its established boundaries.

The Decision in Janus

In Janus Capital Group, Inc. v. First Derivative Traders, investors sued a mutual-fund investment adviser and its parent over allegedly misleading statements in the prospectuses of the mutual funds the adviser managed. The prospectuses were, formally, statements of the funds — legally separate entities — not of the adviser. The question was whether the adviser, which was significantly involved in preparing the prospectuses, could be held to have “made” the statements for purposes of a private Rule 10b-5(b) claim. The Supreme Court held it had not. The Court announced the controlling test: “the maker of a statement is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” One who prepares or publishes a statement on behalf of another is not its maker; attribution to the speaker is strong evidence of who has that ultimate authority.

The “Ultimate Authority” Test

The heart of Janus is the ultimate-authority standard. The Court analogized the maker of a statement to the speaker: just as a speechwriter does not “make” a speech the politician delivers, a party that drafts or supplies the content of a statement does not “make” it if a different entity controls whether and how it is communicated. Crucially, the Court rejected the idea that substantial participation in preparing a statement is enough to make one its maker. Under Janus, significant involvement — even drafting the entire statement — does not create primary liability if the final say over content and communication rests with someone else. This is a control-focused, not a contribution-focused, inquiry.

Why Janus Matters: No Private Aiding-and-Abetting Claim

The stakes of the maker rule flow from an earlier decision. In Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994), the Supreme Court held that there is no private right of action for aiding and abetting a Section 10(b) violation; private plaintiffs may sue only primary violators. Congress later gave the SEC express authority to pursue aiders and abettors, but it did not create a private aiding-and-abetting claim. The combined effect is stark: if a defendant merely assisted in a misstatement but did not “make” it under Janus, a private investor generally cannot sue that defendant at all for the misstatement — even though the SEC might. Janus therefore does more than reallocate liability; for non-makers, it can eliminate private exposure for the statement entirely.

Stoneridge and the Limits on Reaching Secondary Actors

Janus sits alongside Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008), in which the Court refused to extend private 10b-5 liability to business counterparties whose deceptive conduct was not disclosed to or relied upon by the investing public. Stoneridge rejected a theory of “scheme liability” that would have swept in secondary actors far removed from the market’s reliance. Together, Stoneridge and Janus reflect a consistent judicial reluctance to expand the implied private action to reach those who are not primary actors in the deception the market relied upon. For plaintiffs, the message is that attenuated participation — supplying information, providing services, or standing behind a statement made by another — is a weak foundation for a private claim.

Lorenzo and Scheme Liability: Janus Is Not the Whole Story

Janus is specific to Rule 10b-5(b) — the statement subpart. In Lorenzo v. SEC, 587 U.S. 71 (2019), the Supreme Court held that a defendant who did not “make” a false statement under Janus could still be primarily liable under Rule 10b-5(a) and (c) — the scheme and course-of-conduct subparts — for disseminating statements he knew to be false with intent to defraud. In Lorenzo, an investment banker forwarded emails containing false statements drafted by his boss; although he was not the “maker,” knowingly sending the falsehoods to investors was itself a deceptive act supporting scheme liability. The practical upshot: Janus closes the (b) door for non-makers, but Lorenzo shows that dissemination of known falsehoods can still open the (a)/(c) door. The line between the two is contested and fact-intensive, and plaintiffs now frequently plead scheme liability alongside, or instead of, a misstatement claim.

Applying Janus to Common Defendants

The maker rule plays out differently across the players in a securities case. A corporate issuer that files its own SEC reports and press releases is ordinarily the maker of statements attributed to it. An executive who signs or is attributed with a statement typically “makes” it; one who merely contributed behind the scenes may not. An investment adviser to a separate fund, as in Janus itself, generally does not make the fund’s prospectus statements. A parent company does not automatically make a subsidiary’s statements. Outside professionals — lawyers and accountants — who assist in preparing disclosures but do not control whether and how they are communicated usually are not makers, which is why professional secondary liability so often falls outside the private action. Attribution is the key clue: statements attributed to a party are strong evidence that party had ultimate authority.

Pleading Around Janus

Because Janus can be dispositive at the motion-to-dismiss stage, plaintiffs’ counsel pay close attention to attribution and control when framing a complaint. Strategies include pleading that the defendant’s own name or imprimatur appeared on the statement, that the defendant exercised final sign-off authority, or that the defendant disseminated known falsehoods so as to invoke Lorenzo scheme liability under subparts (a) and (c). Defense counsel, in turn, emphasize the formal separateness of entities, the absence of attribution, and the lack of ultimate authority. The Private Securities Litigation Reform Act (PSLRA) heightened pleading standards compound the difficulty: a plaintiff must plead both a primary violator the law allows it to sue and facts giving rise to a strong inference of scienter as to that defendant.

What Janus Means for California Investors and Advisers

For California investors who have lost money on a misrepresentation, Janus is the reason identifying the right defendant matters so much: suing a party that merely assisted, rather than the party with ultimate authority, risks dismissal. For advisers, executives, and professionals, Janus provides meaningful protection against private suits for statements they did not control — but it is not immunity, because the SEC can still pursue aiders and abettors and because Lorenzo exposes those who knowingly disseminate falsehoods. And investors harmed by conduct that Janus places beyond the private action may still have other avenues, including California’s own securities statutes (Corporations Code §§ 25401 and 25501) and common-law fraud claims, which have their own, different rules on who can be held responsible. Evaluating which claims survive — and against whom — requires careful analysis of control, attribution, and the specific conduct alleged.

Control-Person Liability as a Separate Path

Even where Janus bars a private misstatement claim against an individual, plaintiffs may have a distinct route through control-person liability under Section 20(a) of the Securities Exchange Act (15 U.S.C. § 78t(a)). Section 20(a) makes a person who controls a primary violator jointly and severally liable, unless the controlling person acted in good faith and did not directly or indirectly induce the violation. This matters because a controlling individual — an officer or parent — who did not “make” a statement under Janus, and so is not primarily liable for it, may still face secondary liability under Section 20(a) if there is an underlying primary violation by a controlled person or entity. The catch is the predicate: Section 20(a) requires a primary violator to control, so if Janus eliminates the only primary violation, the control-person claim fails with it. Plaintiffs therefore often pair a primary claim against the entity (the “maker”) with a Section 20(a) claim against the executives who controlled it, using the entity’s primary liability as the foundation the individuals could not escape through Janus alone.

Janus in the Lower Courts and Circuit Splits

Since 2011, lower courts have wrestled with Janus’s boundaries. Courts have generally applied the ultimate-authority test strictly, holding that corporate officers who signed or were attributed with statements “made” them, while those merely involved in preparation did not. Harder questions arise with unattributed statements, statements by agents, and intra-corporate attribution — for example, whether a statement attributed to a company is also “made” by the executive who controlled its issuance. The arrival of Lorenzo in 2019 shifted much litigation toward scheme-liability theories under Rule 10b-5(a) and (c), and courts continue to police the line between a pure misstatement claim (governed by Janus) and a dissemination or course-of-conduct claim (governed by Lorenzo and Stoneridge) so that the scheme subparts are not used to evade Janus whenever the gravamen is really a false statement. For practitioners, the result is a fact-intensive inquiry in every case: identify who controlled the statement, whether it was attributed, and whether the defendant’s conduct amounts to making, disseminating, or merely assisting.

Practical Takeaways for Issuers and Officers

For companies and their officers, Janus and its progeny carry concrete governance lessons. Because attribution is central, issuers should be deliberate about who is identified as the source of public statements and should recognize that signing a filing or being quoted in a release can establish “maker” status for the individual. Officers who merely supply data to a statement controlled by the company are generally not makers, but that protection evaporates if they knowingly disseminate falsehoods, which can trigger Lorenzo scheme liability. Robust disclosure controls — verifying facts before they are published, documenting who had final authority, and ensuring statements are accurate when made — remain the best defense, because the surest way to avoid liability under any subpart of Rule 10b-5 is to avoid materially false or misleading statements in the first place. The doctrinal lines matter in litigation, but they are no substitute for disclosure discipline, and officers should not assume that behind-the-scenes involvement is a safe harbor when they are also controlling persons under Section 20(a) or disseminators under Lorenzo.

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Frequently Asked Questions

What did Janus Capital Group v. First Derivative Traders hold?

In 564 U.S. 135 (2011), the Supreme Court held that for a private claim under Rule 10b-5(b), the “maker” of a statement is only the person or entity with ultimate authority over the statement — its content and whether and how to communicate it. A party that merely helps prepare a statement another entity controls does not “make” it and cannot be held primarily liable for it in a private action.

Why does it matter who “makes” the statement?

Because private plaintiffs can sue only primary violators. Under Central Bank (511 U.S. 164), there is no private right of action for aiding and abetting a 10b-5 violation. So if a defendant did not “make” the statement under Janus, a private investor generally cannot sue it for the misrepresentation at all — even though the SEC might pursue it as an aider and abettor.

Does substantial involvement in drafting a statement make you its “maker”?

No. Janus rejected a “substantial participation” test. Even drafting the entire statement does not create primary liability if the ultimate authority over content and communication rested with another party. The inquiry is about control, not contribution. Call Trembach Law Firm at (818) 514-7680.

How does Lorenzo v. SEC change the picture?

Lorenzo (587 U.S. 71 (2019)) held that a person who did not “make” a false statement under Janus can still be primarily liable under Rule 10b-5(a) and (c) — the scheme and course-of-conduct subparts — for knowingly disseminating false statements with intent to defraud. So Janus closes the misstatement door for non-makers, but Lorenzo can open the scheme-liability door.

Can an investment adviser be sued for a fund’s prospectus statements?

Generally not under Rule 10b-5(b), because the fund — a separate legal entity — is ordinarily the maker of its own prospectus statements. That was the exact situation in Janus. Whether the adviser faces any exposure depends on attribution, control, and whether scheme-liability or SEC-enforcement theories apply.

Are corporate executives “makers” of company statements?

Often yes, where a statement is attributed to or signed by the executive, because attribution is strong evidence of ultimate authority. An executive who only contributed behind the scenes to a statement attributed to the company may not be a maker. The analysis is fact-specific and turns on who controlled the statement.

Does Janus protect lawyers and accountants from securities suits?

It often insulates them from private misstatement claims, because professionals who assist in preparing disclosures usually do not control whether and how they are communicated and so are not “makers.” But the SEC can still pursue them as aiders and abettors, and dissemination of known falsehoods can trigger scheme liability under Lorenzo.

If Janus blocks a federal claim, do California investors have other options?

Possibly. California’s securities statutes (Corporations Code §§ 25401 and 25501) and common-law fraud claims have their own rules on who can be held responsible and may reach conduct the federal private action does not. Which claims survive, and against whom, requires analyzing control, attribution, and the specific conduct alleged. Call Trembach Law Firm at (818) 514-7680.

Talk to a California Securities Lawyer About Primary Liability

Whether a defendant can be sued for a false statement under Rule 10b-5 often turns on the Janus “maker” rule and the scheme-liability principles of Lorenzo — technical doctrines that decide who is on the hook and who is beyond a private plaintiff’s reach. Trembach Law Firm, led by Anatolii Trembach (LL.M.; admitted in California), advises investors, officers, directors, advisers, and corporate professionals on primary versus secondary securities liability and the attribution and control questions at the heart of these cases. Call (818) 514-7680 for a confidential consultation.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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