The answer, the Court determined, is perhaps nobody at all.Misleading statements were made, but literally no one can be held accountable.

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When material mistruths about an ordinary firm are exposed, its share price typically drops.

This provides a measure of the loss “caused” by the misstatement.

They may not have understood that statements in some prospectus were misleading.

A violation under Rule 10b-5 must be knowing or reckless to be actionable. Outright lies may be told, yet investors may find they have no practical means of holding anyone accountable.

Mutual fund operators and arrangers of securitizations are underwriters as well as managers.

Underwriting is fraught with conflicts of interest, so Sections 11 and 12 of the Securities Act of 1933 give investors the right to sue when misleading statements come to light.

These sections offer powerful tools to investors in public offerings of ordinary shares.

But they are not so useful to buyers of mutual funds or securitization deals.

The Supreme Court held is that, even though employees of Janus Capital Management company actually wrote any misleading statements, even though they managed nearly every substantive aspect of the operation of the fund, they cannot be held responsible because they did not “make” the statements.

The “person” under law who made the statements was the entity on whose behalf the offending prospectus was issued, the investment fund, which has no capital other than the money it invests for shareholders.

Investment vehicles — mutual funds and ETFs, but also securitizations like RMBS and CDOs — segregate the management and operation of the fund from the legal entity whose securities investors hold.