Clifford Chance

Second Circuit Lowers the Bar for Aiding and Abetting Liability in SEC Securities Fraud Actions

20 August 2012

On August 8, 2012, in SEC v. Apuzzo, the United States Court of Appeals for the Second Circuit ruled that the US Securities and Exchange Commission ("SEC") is not required to establish that a defendant proximately or directly caused injury in a securities fraud action to be liable for aiding and abetting a primary actor. This ruling settles a longstanding question regarding what conduct satisfies the "substantial assistance" prong of the DiBella test for determining aiding and abetting liability in securities fraud enforcement actions.

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