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THE SELL DECISION
Aiding, Abetting Liability Not Added
Joel Hoxie, Joseph G. Adams and Kelly A. Kszywienski (Snell & Wilmer)
In Sell v. Gama, the Arizona Supreme Court held that the Arizona Securities Act (the “ASA”) does not authorize a secondary liability claim for aiding and abetting another’s primary securities fraud.1 In so holding, the Supreme Court followed the federal courts’ interpretation of the federal securities laws, and rejected the plaintiff’s and amici curiae’s argument that aiding and abetting liability was authorized under Section 2003(A) of the ASA.2 Section 2003(A) provides that a securities fraud action “may be brought against any person, including any dealer, salesman or agent, who made, participated in or induced the unlawful sale or purchase.”
This article discusses the Sell Court’s holding, explains why it is consistent with both the text of the ASA and prior constructions of Section 2003, and how Sell affects claims under the ASA.