Control Person Liability

Summary

This practice note discusses control person liability under the Securities Act of 1933, as amended (Securities Act), and Securities Exchange Act of 1934, as amended (Exchange Act). Control person liability provides for liability of any person who controls an individual or entity that violates federal securities laws. Plaintiffs typically file control person claims against individual officers and directors, particularly in light of the Supreme Court's foreclosure of aiding and abetting liability and limits on primary liability in private securities litigation. This practice note provides an overview of secondary liability, including the scope and elements of a control person claim, discusses the different pleading standards for control person liability, and outlines practical considerations in defending against such claims.