Liabilities of lawyers and accountants under Rule 10b-5

Following the U.S. Supreme Court's decision in Central Bank of Denver v. First Interstate Bank of Denver abolishing aiding and abetting liability in private actions, accountants and lawyers remain potentially liable to non-clients under Rule 10b-5 on grounds of primary liability in connection with their clients' securities fraud. The recent decisions with respect to both accountants and lawyers involve alleged misrepresentations or nondisclosures in the communications of the respective professionals or their clients with investors. Predictability, particularly in the;cases involving accountants, is difficult because many of the decisions are irreconcilable and give little certainty. The cases involving lawyers are somewhat less irreconcilable, but as yet cannot be said to have formed a clear, coherent pattern. In summary, the "certainty and predictability" that the U.S. Supreme Court had hoped to achieve in Central Bank have not yet been realized with respect to the liabilities of either accountants or lawyers to non-clients under Rule 10b-5.