Justice Elena Kagan said it seemed clear that Lorenzo’s emails were covered by a longstanding SEC rule known as 10b-5. She pointed to a section of the rule that makes it illegal to “engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.”
“I guess I just don’t get why the act that he did engage in is not an act that operates as a fraud,” Kagan said.
The case, which the court will decide by June, is Lorenzo v. Securities and Exchange Commission, 17-1077.
This article was provided by Bloomberg News.