17 256, 283-84 (3d Cir. 2006); Heit v. Weitzen, 402 F.2d 909, 916 (2d Cir. 1968).9 By contrast, in private § 10(b) actions, the reliance requirement is not a statutory creation but rather was judicially implied to delimit the implied cause of action. See Basic, Inc. v. Levinson, 485 U.S. 224, 243 (1988). Allowing fraud on the market to satisfy reliance in a § 10(b) action does not render § 18(a) a practical nullity only because the class of defendants that can be sued in a § 10(b) private civil action is narrower than the group that can be sued in the express § 18(a) action. “Scheme” liability obliterates that essential limitation. No private plaintiff would sue a secondary actor under § 18(a), which requires actual reliance, if “scheme” liability allows a § 10(b) claim against the same defendant for causing a misstatement without proving actual reliance. Indeed, this is why petitioner, like all other plaintiffs alleging scheme liability, did not sue under § 18(a), even though petitioner describes “[t]he scheme to defraud here” as “causing false financial statements to be published.” Pet. Br. 21-22. That fact speaks volumes about the improper nullifying impact petitioner’s § 10(b) theory would have on § 18(a). See United Sav., 484 U.S. at 375. 2. § 9(e): Like § 18(a), § 9(e) reaches beyond defendants who use or employ the specified unlawful devices. Section 9(a)-(c) prohibits certain enumerated forms of market manipulation, and § 9(a)(4) also prohibits false or misleading statements by a dealer, broker, “or the person selling or 9
An earlier proposed version of § 18(a) required only that the market price of the security be affected by the misstatement. That provision was amended to add the additional requirement of “eyeball” reliance in response to criticism of the potentially sweeping liabilities under the earlier proposal. See Barbara Black, Fraud on the Market: A Criticism of Dispensing with Reliance Requirements in Certain Open Market Transactions, 62 N.C. L. Rev. 435, 464-65 & nn.191 & 192 (1984). Accord In re MDC Holdings Sec. Litig., 754 F. Supp. 785, 798 (S.D. Cal. 1990); Hoover v. Allen, 241 F. Supp. 213, 221-23 (S.D.N.Y. 1965).
