You can sue primary violators of Rule 10b-5. You cannot sue those who merely aid and abet a securities fraud. Trouble is, the line between primary violators and those who aid and abet a securities fraud moves like the San Andreas fault.
In the landmark Central Bank of Denver case, the US Supreme Court ruled that there is no private right of action available against those who aided and abetted another to commit securities fraud. In other words, you can't sue people who merely helped another to defraud you.
Ever since the Central Bank decision, there has been considerable disagreement about where to draw the line between aiders and abettors and primary violators (who, unlike aiders and abettors, can be sued for investment losses).
The debate about who can be sued for securities fraud cannot be settled until there is a consensus line in the sand type test for separating primary violators from mere helpers.
The following post, reprinted from Jim Hamilton’s World of Securities Regulation, describes the SEC's position on a major point of controversy in the "who to sue" debate.