29 transactions of commercial counterparties would normally not be publicly available information. Stoneridge illustrates this. The market knew about Charter’s financial statements but was unaware of any conduct by respondents. 2. “Scheme” Liability Is Incompatible With The PSLRA’s Loss Causation Requirement. As noted above, the PSLRA requires that the plaintiff allege and prove that “the act or omission of the defendant alleged to violate this chapter caused the loss.” 15 U.S.C. § 78u-4(b)(4). Loss causation is satisfied only when the issuer’s stock price declined because of the particular defendant’s deceptive act or omission. Dura, 544 U.S. at 344; see also Lattanzio v. Deloitte & Touche LLP, 476 F.3d 147, 158 (2d Cir. 2007) (plaintiffs “have not alleged facts to show that Deloitte’s misstatements, among others (made by Warnaco) that were much more consequential and numerous, were the proximate cause of plaintiffs’ loss”) (emphasis added). In this case, as in other commercial counterparty cases, the “act or omission of the defendant” vendors was never disclosed to either inflate or deflate the market price of the issuer’s stock. Nonetheless, petitioner alleges that Charter’s much broader “financial statements caused the price of Charter’s stock to be inflated” and that respondents should be held responsible for all $7 billion in damages flowing from Charter’s financial statements, Pet. Br. at 38, even though respondents’ transactions allegedly increased operating cash flow by only $17 million. Scientific-Atlanta Cert. Opp. App. at 33 (Am. Cmpl. ¶ 79.) Because Charter’s statements and omissions were not “the act or omission of the defendant” respondents, the PSLRA loss causation requirement is not satisfied. This is confirmed by Dura, which held that loss causation is at least as demanding as common law proximate cause. See
