Life After Central Bank - Should Securities Professionals Really Sleep Better at Night?

In Central Bank of Denver. N.A. v. First Interstate Bank of Denver. N.A., 511 U.S. 164 (1994), the United States Supreme Court held that there is no private cause of action for aiding and abetting under Section 10(b)/Rule 10b-5 of the Securities Exchange Act of 1934. Prior to this decision, professionals such as accountants, underwriters and attorneys frequently were named as defendants in federal securities law class actions as aiders and abettors.

This article surveys post-Central Bank decisions addressing (1) the recasting of secondary liability claims as primary liability claims so as to circumvent the impact of Central Bank, as well as the ongoing debate regarding the "significant role" theory,2 and (2) efforts, usually unsuccessful, to expose secondary actors to section 10(b) liability under conspiracy and respondeat superior theories.