16 §§ 9(e), 16(b), and 18(a) of the same Act”). Private civil “scheme” liability under § 10(b) violates this principle. 1. § 18(a): Congress addressed in § 18(a) of the 1934 Act, not § 10(b), when a silent defendant should face private civil liability based on another defendant’s misstatement or omission. Ignoring § 18(a), however, the proponents of “scheme” liability seek to imply into § 10(b) a cause of action that holds one defendant, usually a commercial counterparty, liable because another defendant, usually the issuer, makes a misstatement or material omission to the market. Section 18(a) imposes liability on a defendant who “shall make or cause to be made” a statement that is “false or misleading with respect to any material fact” in “any application, report or document filed” pursuant to the 1934 Act, including the financial statements at issue here. 15 U.S.C. § 78r(a). In contrast, in § 10(b), Congress did not prohibit “causing” a deceptive device—e.g., causing an issuer’s misrepresentation in its financial statements—but instead stopped at the defendant who actually “use[s] or employ[s]” the deceptive device in connection with a purchase or sale of securities. Although § 18(a) reaches a broader array of defendants than § 10(b), Congress imposed a critical limitation to preclude open-ended damages awards to the market as a whole: the plaintiff must have actually read and relied upon the misstatement. Section 18(a) limits potential plaintiffs to “any person . . . who, in reliance upon such statement, shall have purchased or sold a security at a price which was affected by such statement, for damages caused by such reliance.” Id. (emphasis added). Because the statute expressly refers to the plaintiff’s reliance on the specific statement – in addition to the requirement of an effect on the market price – it can be satisfied only by proof of individual reliance, rather than by the fraud-on-the-market presumption. See, e.g., In re Suprema Specialties, Inc. Sec. Litig., 438 F.3d
