SEC v. Pirate Investor LLC: Expansion of the “In Connection With” Requirement Under Exchange Act Section 10(b)

January 12, 2010
The U.S. Court of Appeals for the Fourth Circuit has decided SEC v. Pirate Investor LLC, a civil complaint by the Securities and Exchange Commission against a publisher of investment newsletters and its editor-in-chief for violations of Section 10(b) of the Securities Act of 1933. The case, which involved allegedly false information contained in a special report recommending investment in a uranium-enrichment services company and a widely distributed email advertising the report, has the potential to expand substantially the “in connection with” requirement of Section 10(b). This update summarizes the Fourth Circuit’s decision, focusing on the court’s analysis of this requirement.