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Supreme Court to Review Direct Liability of Investment Adviser for Prospectus Disclosure

At the end of its term, the Supreme Court granted certiorari in Janus Capital Group, Inc. et al., v. First Derivative Traders, Case No.09-525, and will address whether an investment adviser can be held primarily liable under Section 10(b) of the Securities and Exchange Act of 1934 (Exchange Act) for participating in drafting or approving allegedly misleading statements in a mutual fund prospectus. Janus Capital will be an important case to watch, not only for investment companies and their advisers, but for other service providers such as accountants, attorneys and, consultants that are involved in preparing prospectuses and similar documents that are ultimately disseminated to investors.

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