Securities — What Is the Significance of the Choice of Cert Grant?

Is there any significance to the fact that the Supreme Court granted cert to review the Eighth Circuit decision, which affirmed dismissal on a traditional Central Bank analysis (Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 443 F.3d 987 (8th Cir. 2006)), rather than the Ninth Circuit decision which adopted the SEC’s substantial-participation test to determine primary liability under the federal securities laws (Simpson v. AOL Time Warner Inc., 452 F.3d 1040 (9th Cir. 2006))?

The Central Bank question presented in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 443 F.3d 987 (8th Cir. 2006), in which the Supreme Court granted certiorari on March 26, 2007 is: Whether this Court’s decision in Central Bank, N.A. v. First Interstate Bank, N.A., 511 U.S. 164 (1994), forecloses claims for deceptive conduct under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5(a) and (c), 17 C.F.R. 240.10b-5(a) and (c), where Respondents engaged in transactions with a public corporation with no legitimate business or economic purpose except to inflate artificially the public corporation’s financial statements, but where Respondents themselves made no public statements concerning those transactions.

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