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Exchange Commission set forth a standard which is consistent with Rule 10b-5(a) and (c) and contrary to the decision of the Eighth Circuit here. Under the Securities and Exchange Commission’s proposed rule, primary liability is described as follows:
Any person who directly or indirectly engages in a manipulative or deceptive act as part of a scheme to defraud can be a primary violator of Section 10b-5 and Rule 10b-5(a); any person who provides assistance to other participants in a scheme but does not himself engage in a manipulative or deceptive act can only be an aider and abettor.
Simpson v. Homestore.com, Inc., No. 04-55665, Brief of the Securities and Exchange Commission, Amicus Curiae, in Support of Positions that Favor Appellant, at * 16.
E. CONGRESS HAS NOT SOUGHT TO CHANGE THE PLAIN LANGUAGE OF THE STATUTE
Congress has not placed any limitation on the scope of liability under Section 10(b) and Rule 10b-5, but instead has confirmed that the statute and rule apply to conduct beyond misrepresentations and material omissions. When the PSLRA was enacted in 1995, Congress provided two separate tests to define a "knowing violation"—one for misrepresentations and the other for conduct. 15 U.S.C. § 78u-4(f)(1). In SLUSA, Congress referred to misrepresentations and omissions in the disjunctive from other deceptive conduct, indicating that each term had separate meaning. 15 U.S.C. § 78bb(f)(5)(E). If Congress had intended Section 10(b) and Rule 10b-5 to apply only to misrepresentations and omissions, then it was wasting its time in drafting the language in the PSLRA and SLUSA
