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Lies Without Liars? Janus Capital and Conservative Securities Jurisprudence

33 Pages Posted: 25 Feb 2012 Last revised: 17 May 2014

Donald C. Langevoort

Georgetown University Law Center

Date Written: 2013


The Supreme Court’s recent Janus Capital case offers a reading of the word “make” in Rule 10b-5 that speaks to ultimate legal authority over the communication in question. This creates the real possibility that we can have lies without liars, an entirely perplexing result in terms of any purposive meaning of the rule. In so holding, Justice Thomas joined a seemingly short list of judges who suggest that legal formalism is a particularly good weapon with which to fight securities fraud. This paper explores Janus through the lens of conservative textualism, which takes us through a much longer intellectual history with respect to secondary liability (well beyond Central Bank of Denver) than is generally acknowledged. It makes two important claims: first, that a better reading of the opinion is one that limits it to private securities litigation, not SEC enforcement, even though the early precedent tilts in the other direction; and second, that Janus also plants seeds for a conservative retrenchment on the meaning of the “in connection with” requirement under Section 10(b) and Rule 10b-5, at least as applied to private securities litigation. It then examines some open questions under the “ultimate authority” test — the ability to reach officers and directors of the issuer, the problem of informal publicity, attribution of knowledge and “scheme” pleading, and considers whether the SEC can overturn Janus on its own by a simple clarifying amendment to its rule.

Keywords: securities, fraud, statutory intepretation

JEL Classification: K22, K29, K19

Suggested Citation

Langevoort, Donald C., Lies Without Liars? Janus Capital and Conservative Securities Jurisprudence (2013). Washington University Law Review, Vol. 90, pp. 933-964, 2013; Georgetown Public Law Research Paper No. 12-019; Georgetown Law and Economics Research Paper No. 12-006. Available at SSRN: or

Donald C. Langevoort (Contact Author)

Georgetown University Law Center ( email )

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Washington, DC 20001
United States
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202-662-9412 (Fax)

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