Subprime Issues: Stoneridge may be a shield for some financial advisors.

Implications: Stoneridge seems to offer a safe haven for some financial transactions under Rule 10 (b)! The way the decision is written, however, does not mean that this cloak of invincibility is available under all circumstances. 

Analysis: The caveat to Stoneridge seems to be, as it should, that as long as the misleading and/or fraudulent statements were not actually directly relied upon then they have protection under federal securities laws.   Regardless, given the rippling affect of the subprime issues, financial advisors may still face suits under state common law or from similar statutory provisions.  As this article details well, private causes of action may be essentially barred, but not the SEC Enforcement Powers or actions under aiding & abetting under State Statutes or common law. There is also the over riding issue of potential allegations of reckless disregard and/or wilful and wanton actions.  More over, one need not forget the simplest element must still be established: Detrimental Reliance.  The US Supreme court has simply carved out a situation that will not likely allow exposure, not on that has no exposure.  As with most cases and innovative pleadings there are other ways to enter the house!  The SEC will also remain a close microscope on any position that potentially defrauds.  http://www.businessinsurance.com/cgi-bin/article.pl?article_id=24123.