15 U.S.C. § 78t

Liability of controlling persons and persons who aid and abet violations

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(a) Joint and several liability; good faith defense

Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable (including to the Commission in any action brought under paragraph (1) or (3) of section 78u(d) of this title), unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.

(b) Unlawful activity through or by means of any other person

It shall be unlawful for any person, directly or indirectly, to do any act or thing which it would be unlawful for such person to do under the provisions of this chapter or any rule or regulation thereunder through or by means of any other person.

It shall be unlawful for any director or officer of, or any owner of any securities issued by, any issuer required to file any document, report, or information under this chapter or any rule or regulation thereunder without just cause to hinder, delay, or obstruct the making or filing of any such document, report, or information.

(d) Liability for trading in securities while in possession of material nonpublic information

Wherever communicating, or purchasing or selling a security while in possession of, material nonpublic information would violate, or result in liability to any purchaser or seller of the security under any provisions of this chapter, or any rule or regulation thereunder, such conduct in connection with a purchase or sale of a put, call, straddle, option, privilege or security-based swap agreement with respect to such security or with respect to a group or index of securities including such security, shall also violate and result in comparable liability to any purchaser or seller of that security under such provision, rule, or regulation.

(e) Prosecution of persons who aid and abet violations

For purposes of any action brought by the Commission under paragraph (1) or (3) of section 78u(d) of this title, any person that knowingly or recklessly provides substantial assistance to another person in violation of a provision of this chapter, or of any rule or regulation issued under this chapter, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.

(f) Limitation on Commission authority

The authority of the Commission under this section with respect to security-based swap agreements shall be subject to the restrictions and limitations of section 78c–1(b) of this title.

(June 6, 1934, ch. 404, title I, § 20, 48 Stat. 899; May 27, 1936, ch. 462, § 6, 49 Stat. 1379; Pub. L. 88–467, § 9, Aug. 20, 1964, 78 Stat. 579; Pub. L. 98–376, § 5, Aug. 10, 1984, 98 Stat. 1265; Pub. L. 104–67, title I, § 104, Dec. 22, 1995, 109 Stat. 757; Pub. L. 105–353, title III, § 301(b)(12), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(3), title III, § 303(i), (j)], Dec. 21, 2000, 114 Stat. 2763, 2763A–426, 2763A–456; Pub. L. 111–203, title VII, § 762(d)(6), title IX, §§ 929O, 929P(c), July 21, 2010, 124 Stat. 1761, 1862, 1865.)Editorial NotesReferences in Text

This chapter, referred to in text, was in the original “this title”. See References in Text note set out under section 78a of this title.

Amendments

2010—Subsec. (a). Pub. L. 111–203, § 929P(c), inserted “(including to the Commission in any action brought under paragraph (1) or (3) of section 78u(d) of this title)” after “controlled person is liable”.

Subsec. (d). Pub. L. 111–203, § 762(d)(6)(A), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreement”.

Subsec. (e). Pub. L. 111–203, § 929O, inserted “or recklessly” after “knowingly”.

Subsec. (f). Pub. L. 111–203, § 762(d)(6)(B), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreements”.

2000—Subsec. (d). Pub. L. 106–554, § 1(a)(5) [title III, § 303(i)], amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “Wherever communicating, or purchasing or selling a security while in possession of, material nonpublic information would violate, or result in liability to any purchaser or seller of the security under any provision of this chapter, or any rule or regulation thereunder, such conduct in connection with a purchase or sale of a put, call, straddle, option,, privilege, or security futures product with respect to such security or with respect to a group or index of securities including such security, shall also violate and result in comparable liability to any purchaser or seller of that security under such provision, rule, or regulation.”

Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(3)], substituted “, privilege, or security futures product” for “or privilege”.

Subsec. (f). Pub. L. 106–554, § 1(a)(5) [title III, § 303(j)], added subsec. (f).

1998—Subsecs. (e), (f). Pub. L. 105–353 redesignated subsec. (f) as (e).

1995—Pub. L. 104–67, § 104(1), substituted “liability of controlling persons and persons who aid and abet violations” for “Liabilities of controlling persons” in section catchline.

Subsec. (f). Pub. L. 104–67, § 104(2), added subsec. (f).

1984—Subsec. (d). Pub. L. 98–376 added subsec. (d).

1964—Subsec. (c). Pub. L. 88–467 extended application of provisions of subsec. (c) by substituting the prohibition against any officer or director of, or an owner of securities issued by, a company from hindering, delaying, or obstructing the preparation or filing of any report, document, or information required to be filed under this chapter for existing provisions applicable only to filings by companies with securities registered on a national securities exchange or subject to the provisions of section 78o(d) of this title.

1936—Subsec. (c). Act May 27, 1936, inserted “or any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title”.

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Amendment by sections 929O and 929P(c) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by section 762(d)(6) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

Effective Date of 1995 Amendment

Amendment by Pub. L. 104–67 not to affect or apply to any private action arising under this chapter or title I of the Securities Act of 1933 (15 U.S.C. 77a et seq.), commenced before and pending on Dec. 22, 1995, see section 108 of Pub. L. 104–67, set out as a note under section 77l of this title.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–376 effective Aug. 10, 1984, see section 7 of Pub. L. 98–376, set out as a note under section 78c of this title.

Effective Date of 1964 Amendment

Amendment by Pub. L. 88–467 effective Aug. 20, 1964, see section 13 of Pub. L. 88–467, set out as a note under section 78c of this title.

Construction of 1995 Amendment

Nothing in amendment by Pub. L. 104–67 to be deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under this chapter, see section 203 of Pub. L. 104–67, set out as a Construction note under section 78j–1 of this title.

Notes of Decisions

Cited in 2,602 cases (404 in the last 5 years), 1941–2026 · leading case: Cent. Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U.S. 164 (1994).

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Cent. Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U.S. 164 (1994). · cites it 8× “§ 78p(a) (direct or indirect ownership); § 20, 15 U. S. C. § 78t (direct or indirect control of person violating Act).”

Stoneridge Inv. Partners, LLC v. Sci.-Atlanta, Inc., 552 U.S. 148 (2008). · cites it 4× “15 U.S.C. § 78t(e). The § 10(b) implied private right of action does not extend to aiders and abettors.”

Matrix Capital Mgmt. Fund v. BearingPoint, Inc., 576 F.3d 172 (4th Cir. 2009). · cites it 6× “" 15 U.S.C. § 78t(a). Because the complaint fails to withstand a Rule 12(b)(6) motion with respect to the predicate violation of § 10(b), it also fails with respect to the § 20(a) claims.”

Kay Hollinger Richard Llewelyn Jones Edward E. Nissen Judy D'Arcy K-Judy, Ltd. v. Titan Capital Corp. Emil Wilkowski Painter Fin. Grp., Ltd., 914 F.2d 1564 (9th Cir. 1990). · cites it 7× “We affirm summary judgment in favor of Titan on all federal claims, except three: 1) the claim that Titan is liable for Wilkowski’s wrongdoing as a “controlling person” under § 20(a) of the 1934 Act, 15 U.S.C. § 78t(a); 2) the claim that Titan is liable as a “controlling person”…”

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007). · cites it 2× “10b-5 (2006), also that Notebaert was a "controlling person" under § 20(a) of the 1934 Act, 15 U.S.C. § 78t(a), and therefore derivatively liable for the company's fraudulent acts.”

Janus Capital Grp., Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011). · cites it 4× “How then does Stone-ridge support the majority’s new rule? The majority adds that its rule is necessary to avoid “a theory of liability similar to — but broader in application than” — §20(a)’s liability, for “ '[ejvery person who, directly or indirectly, controls any person…”

Phillip J. Singer v. Kenneth Reali, 883 F.3d 425 (4th Cir. 2018). · cites it 4× “See 15 U.S.C. § 78t(a). 12 Section 10(b) and SEC Rule 10b-5, along with section 20(a), “act to protect the integrity of the market in securities and prohibit fraud in connection with the purchase or sale of a security.”

U.S. Sec. & Exch. Comm'n v. Big Apple Consulting USA, Inc., 783 F.3d 786 (11th Cir. 2015). · cites it 7× “Section 20(e) of the Exchange Act was adopted as 'part of the Private Securities Litigation Reform Act of 1995 (PSLRA), and at the time relevant to this case, it authorized the SEC to bring an action against any person who “knowingly provides substantial assistance” to a primary…”

Lorenzo v. SEC. & Exch. Comm'n, 139 S. Ct. 1094 (2019). · cites it 3× “" 15 U.S.C. § 78t "(e) Prosecution of persons who aid and abet violations "For purposes of any action brought by the Commission .”

Sec. & Exch. Comm'n v. Todd, 642 F.3d 1207 (9th Cir. 2011). · cites it 6× “There are also issues of material fact as to whether Weitzen was a “control person” under Section 20(a), 15 U.S.C. § 78t(a). We affirm the district court’s order granting Weitzen’s motion for summary judgment as to the Rule 13b2-2 claim because there is no evidence that Weitzen…”

Michael E. Moss v. Morgan Stanley Inc., E. Jacques Courtois, Jr., Adrian Antoniu, & James M. Newman, Morgan Stanley Inc. & James M. Newman, 719 F.2d 5 (2d Cir. 1983). · cites it 5× “damages from Newman for allegedly violating section 10(b) of the 1934 Act and rule 10b-5 thereunder by purchasing Deseret shares with knowledge of the imminent tender offer and without disclosing such information to Deseret *9 shareholders; 2 (2) Moss sought to recover damages…”

Lustgraaf v. Behrens, 619 F.3d 867 (8th Cir. 2010). · cites it 4× “Federal Control-Person Liability Counts II and III of the operative complaints allege claims against Sunset and KCL for control-person liability under § 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78t(a). The purpose of the federal control-person statute is to…”

Show all 2,602 citing cases →

— 15 U.S.C. § 78t(3) — 1 case

In Re Enron Corp. Secur., Deriv. &\ Erisa\" Lit.", 610 F. Supp. 2d 600 (S.D. Tex. 2009).

— 15 U.S.C. § 78t(a) — 1995 cases

Matrix Capital Mgmt. Fund v. BearingPoint, Inc., 576 F.3d 172 (4th Cir. 2009). “" 15 U.S.C. § 78t(a). Because the complaint fails to withstand a Rule 12(b)(6) motion with respect to the predicate violation of § 10(b), it also fails with respect to the § 20(a) claims.”

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007). “10b-5 (2006), also that Notebaert was a "controlling person" under § 20(a) of the 1934 Act, 15 U.S.C. § 78t(a), and therefore derivatively liable for the company's fraudulent acts.”

Phillip J. Singer v. Kenneth Reali, 883 F.3d 425 (4th Cir. 2018). “See 15 U.S.C. § 78t(a). 12 Section 10(b) and SEC Rule 10b-5, along with section 20(a), “act to protect the integrity of the market in securities and prohibit fraud in connection with the purchase or sale of a security.”

Kay Hollinger Richard Llewelyn Jones Edward E. Nissen Judy D'Arcy K-Judy, Ltd. v. Titan Capital Corp. Emil Wilkowski Painter Fin. Grp., Ltd., 914 F.2d 1564 (9th Cir. 1990). “We affirm summary judgment in favor of Titan on all federal claims, except three: 1) the claim that Titan is liable for Wilkowski’s wrongdoing as a “controlling person” under § 20(a) of the 1934 Act, 15 U.S.C. § 78t(a); 2) the claim that Titan is liable as a “controlling person”…”

Sec. & Exch. Comm'n v. Todd, 642 F.3d 1207 (9th Cir. 2011). “There are also issues of material fact as to whether Weitzen was a “control person” under Section 20(a), 15 U.S.C. § 78t(a). We affirm the district court’s order granting Weitzen’s motion for summary judgment as to the Rule 13b2-2 claim because there is no evidence that Weitzen…”

— 15 U.S.C. § 78t(a)(1934) — 1 case

Fraioli v. Lemcke, 328 F. Supp. 2d 250 (D.R.I. 2004).

— 15 U.S.C. § 78t(a)(1999) — 1 case

Kalnit v. Eichler, 85 F. Supp. 2d 232 (S.D.N.Y. 1999).

— 15 U.S.C. § 78t(a)(2000) — 2 cases

Filler v. Lernout (In Re Lernout & Hauspie Sec. Litig.), 286 B.R. 33 (D. Mass. 2002).

In Re Credit Suisse-AOL Sec. Litig., 465 F. Supp. 2d 34 (D. Mass. 2006).

— 15 U.S.C. § 78t(a)(2002) — 1 case

In Re Enron Corp. Sec., Derivative & ERISA Lit., 258 F. Supp. 2d 576 (S.D. Tex. 2003).

— 15 U.S.C. § 78t(a)(2003) — 1 case

Steed Fin. LDC v. Laser Advisers, Inc., 258 F. Supp. 2d 272 (S.D.N.Y. 2003).

— 15 U.S.C. § 78t(a)(2006) — 1 case

In Re Fed. Nat'l Mortg. Ass'n Sec., Derivative, & \Erisa\" Litig.", 4 F. Supp. 3d 94 (D.D.C. 2013).

— 15 U.S.C. § 78t(a)(2012) — 1 case

93 Houston v. Se. Investments N.C., Inc, 2017 COA 66 (Colo. Ct. App. 2017).

— 15 U.S.C. § 78t(b) — 34 cases

Dirks v. Sec. & Exch. Comm'n, 463 U.S. 646 (1983).

Plotkin v. IP Axess Inc., 407 F.3d 690 (5th Cir. 2005).

Janus Capital Grp., Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011). “How then does Stone-ridge support the majority’s new rule? The majority adds that its rule is necessary to avoid “a theory of liability similar to — but broader in application than” — §20(a)’s liability, for “ '[ejvery person who, directly or indirectly, controls any person…”

Horizon Asset Mgmt. Inc. v. H & R BLOCK, INC., 580 F.3d 755 (8th Cir. 2009).

Barry Belmont v. MB Inv. Partners, Inc., 708 F.3d 470 (3rd Cir. 2013).

— 15 U.S.C. § 78t(c) — 1 case

Canadian Javelin Ltd. v. Brooks, 462 F. Supp. 190 (S.D.N.Y. 1978).

— 15 U.S.C. § 78t(d) — 9 cases

Moskowitz v. Lopp, 128 F.R.D. 624 (E.D. Pa. 1989).

In Re ORFA Sec. Litig., 654 F. Supp. 1449 (D.N.J. 1987).

Clay v. Riverwood Int'l Corp., 157 F.3d 1259 (11th Cir. 1998).

Fry v. UAL Corp., 895 F. Supp. 1018 (N.D. Ill. 1995).

Ceres Partners v. GEL Assocs., 918 F.2d 349 (2d Cir. 1990).

— 15 U.S.C. § 78t(d)(2) — 2 cases

Sec. & Exch. Comm'n v. Weed, 315 F. Supp. 3d 667 (D.D.C. 2018).

Sec. & Exch. Comm'n v. Weed (D. Mass. 2018).

— 15 U.S.C. § 78t(d)(2)(c) — 1 case

SEC v. Osaki (9th Cir. 2006).

— 15 U.S.C. § 78t(d)(2)(e) — 1 case

Sec. & Exch. Comm'n v. Jt Wallenbrock & Assocs. Citadel Capital Mgmt. Grp., Inc., & Larry Toshio Osaki Van Y. Ichinotsubo, 440 F.3d 1109 (9th Cir. 2006).

— 15 U.S.C. § 78t(d)(3) — 1 case

Sec. & Exch. Comm'n v. Deyon, 977 F. Supp. 510 (D. Me. 1997).

— 15 U.S.C. § 78t(e) — 141 cases

Stoneridge Inv. Partners, LLC v. Sci.-Atlanta, Inc., 552 U.S. 148 (2008). “15 U.S.C. § 78t(e). The § 10(b) implied private right of action does not extend to aiders and abettors.”

Sec. & Exch. Comm'n v. Tambone, 597 F.3d 436 (1st Cir. 2010).

U.S. Sec. & Exch. Comm'n v. Big Apple Consulting USA, Inc., 783 F.3d 786 (11th Cir. 2015). “Section 20(e) of the Exchange Act was adopted as 'part of the Private Securities Litigation Reform Act of 1995 (PSLRA), and at the time relevant to this case, it authorized the SEC to bring an action against any person who “knowingly provides substantial assistance” to a primary…”

Sec. & Exch. Comm'n v. Apuzzo, 689 F.3d 204 (2d Cir. 2012).

Lorenzo v. SEC. & Exch. Comm'n, 139 S. Ct. 1094 (2019). “" 15 U.S.C. § 78t "(e) Prosecution of persons who aid and abet violations "For purposes of any action brought by the Commission .”

— 15 U.S.C. § 78t(f) — 13 cases

Fed. Sec. L. Rep. P 90,266 Irene L. Wright, on Behalf of Herself & All Others Similarly Situated v. Ernst & Young LLP, 152 F.3d 169 (2d Cir. 1998).

In Re Enron Corp. Sec., Derivative & ERISA Lit., 235 F. Supp. 2d 549 (S.D. Tex. 2002).

United States v. Sonia Irwin, 149 F.3d 565 (7th Cir. 1998).

Menzies v. Seyfarth Shaw LLP, 197 F. Supp. 3d 1076 (N.D. Ill. 2016).

In Re Homestore.com, Inc. Sec. Litig., 252 F. Supp. 2d 1018 (C.D. Cal. 2003).

— 15 U.S.C. § 78t(g) — 2 cases

Sec. & Exch. Comm'n v. Weed, 315 F. Supp. 3d 667 (D.D.C. 2018).

Sec. & Exch. Comm'n v. Babini (D. Mass. 2024).

— 15 U.S.C. § 78t(l) — 1 case

In Re Williams Sec. Litig., 339 F. Supp. 2d 1242 (N.D. Okla. 2003).

— 15 U.S.C. § 78t(á) — 1 case

Paul F. Newton & Co. v. Texas Com. Bank, 630 F.2d 1111 (5th Cir. 1980).

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