 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued September 15, 2016        Decided September 29, 2017

                       No. 15-1202

                   FRANCIS V. LORENZO,
                       PETITIONER

                            v.

         SECURITIES AND EXCHANGE COMMISSION,
                      RESPONDENT


           On Petition for Review of an Order of
          the Securities & Exchange Commission


    Robert G. Heim argued the cause for petitioner. With
him on the briefs were Stephanie Rapp-Tully and Steven L.
Herrick.

    Martin V. Totaro, Attorney, Securities and Exchange
Commission, argued the cause for respondent. On the brief
were Anne K. Small, General Counsel, Michael A. Conley,
Solicitor, and Benjamin L. Schiffrin, Senior Litigation
Counsel.

    Before: GRIFFITH, KAVANAUGH, and SRINIVASAN, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge SRINIVASAN.
                              2
    Dissenting opinion filed by Circuit Judge KAVANAUGH.

     SRINIVASAN, Circuit Judge:           The Securities and
Exchange Commission found that Francis Lorenzo sent email
messages to investors containing misrepresentations about
key features of a securities offering. The Commission
determined that Lorenzo’s conduct violated various securities-
fraud provisions. We uphold the Commission’s findings that
the statements in Lorenzo’s emails were false or misleading
and that he possessed the requisite intent.

     We cannot sustain, however, the Commission’s
determination that Lorenzo’s conduct violated one of the
provisions he was found to have infringed: Rule 10b-5(b).
That rule bars the making of materially false statements in
connection with the purchase or sale of securities. We
conclude that Lorenzo did not “make” the false statements at
issue for purposes of Rule 10b-5(b) because Lorenzo’s boss,
and not Lorenzo himself, retained “ultimate authority” over
the statements. Janus Capital Grp., Inc. v. First Derivative
Traders, 564 U.S. 135, 142 (2011).

     While Lorenzo’s boss, and not Lorenzo, thus was the
“maker” of the false statements under Rule 10b-5(b), Lorenzo
played an active role in perpetrating the fraud by folding the
statements into emails he sent directly to investors in his
capacity as director of investment banking, and by doing so
with an intent to deceive. Lorenzo’s conduct therefore
infringed the other securities-fraud provisions he was charged
with violating. But because the Commission’s choice of
sanctions to impose against Lorenzo turned in some measure
on its misimpression that his conduct violated Rule 10b-5(b),
we set aside the sanctions and remand the matter to enable the
Commission to reassess the appropriate penalties.
                               3
                               I.

                              A.

      In February 2009, Francis Lorenzo became the director of
investment banking at Charles Vista, LLC. Charles Vista was
a registered broker-dealer owned by Gregg Lorenzo, no
relation to Francis. (For clarity of reference, we will refer to
Francis Lorenzo as “Lorenzo” and will use Gregg Lorenzo’s
first name when referring to him.)

     Charles Vista’s biggest client, and Lorenzo’s only
investment-banking client at the time, was a start-up company
named Waste2Energy Holdings, Inc. (W2E). W2E claimed to
have developed a “gasification” technology that could
generate electricity by converting solid waste to gas. W2E’s
business model relied on the technology’s living up to its
potential. If it failed to do so, the great majority of W2E’s
assets—the “intangibles,” in balance-sheet lingo—would have
to be written off entirely.

     W2E’s conversion technology never materialized. In
September 2009, W2E sought to escape financial ruin by
offering up to $15 million in convertible debentures.
(Debentures are “debt secured only by the debtor’s earning
power, not by a lien on any specific asset.” BLACK’S LAW
DICTIONARY 486 (10th ed. 2014)). Charles Vista would serve
as the exclusive placement agent for W2E’s debenture
offering.

     W2E’s most recent SEC filing at the time, its June 3,
2009 Form 8-K (used to notify investors of certain specified
events), contained no indication of any possible devaluation
of the company’s intangible assets. Rather, the form stated
that W2E’s intangibles were worth just over $10 million as of
                              4
the end of 2008. On September 9, 2009, W2E issued a
Private Placement Memorandum as a guidebook for potential
investors in the debentures. That guidebook, like the June
2009 Form 8-K, included no mention of any devaluation of
the company’s intangibles.

     Following a lengthy audit, however, W2E changed its
public tune. On October 1, 2009, the company filed an
amended Form 8-K in which it reported a total “impairment”
of its intangible assets because “management made a
determination that the value of the assets acquired were of no
value.” J.A. 703. As of March 31, 2009, W2E now clarified,
its gasification technology should have been valued at zero,
and its total assets at only $370,552. On the same day it filed
its amended Form 8-K, October 1, 2009, W2E also filed a
quarterly Form 10-Q in which it valued its total assets at
$660,408 as of June 30, 2009.

     Later on October 1, Lorenzo’s secretary alerted him (via
email) about W2E’s amended Form 8-K filing. The next day,
Lorenzo emailed all Charles Vista brokers links to both of
W2E’s October 1 filings. On October 5, he received an email
from W2E’s Chief Financial Officer explaining the reasons
for “[t]he accumulated deficit we have reported.” Id. at 740.
The CFO reiterated that W2E had written off “all of our
intangible assets . . . of about $11 million” due to “our
assessment of the value of what those asset[s] are worth
today.” Id.

     On October 14, Lorenzo separately emailed two potential
investors “several key points” about W2E’s pending
debenture offering. Id. at 794, 796. His emails, however,
omitted any mention of the wholesale devaluation of W2E’s
intangibles. On the contrary, Lorenzo’s emails assured both
recipients that the offering came with “3 layers of protection:
                              5
(I) [W2E] has over $10 mm in confirmed assets; (II) [W2E]
has purchase orders and LOI’s for over $43 mm in orders;
(III) Charles Vista has agreed to raise additional monies to
repay these Debenture holders (if necessary).” Id. One of
Lorenzo’s messages said it had been sent “[a]t the request of
Gregg Lorenzo,” id. at 796, and the other stated it had been
sent “[a]t the request of Adam Spero [a broker with Charles
Vista] and Gregg Lorenzo,” id. at 794. In both messages,
Lorenzo urged the recipients to “[p]lease call [him] with any
questions.” Id. at 794, 796. And he signed both messages
with his name and title as “Vice President – Investment
Banking.” Id.

                             B.

     On February 15, 2013, the Commission commenced
cease-and-desist proceedings against Lorenzo, Gregg
Lorenzo, and Charles Vista. It charged each with violating
three securities-fraud provisions: (i) Section 17(a)(1) of the
Securities Act of 1933, 15 U.S.C. § 77q(a)(1); (ii) Section
10(b) of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78j; and (iii) Securities Exchange Act Rule 10b-5, 17 C.F.R.
§ 240.10b-5. Gregg Lorenzo and Charles Vista settled the
charges against them, but the claims against Lorenzo
proceeded to resolution before the agency.

     An administrative law judge concluded that Lorenzo had
“willfully violated the antifraud provisions of the Securities
and Exchange Acts by his material misrepresentations and
omissions concerning W2E in the emails.” Gregg C.
Lorenzo, Francis V. Lorenzo, and Charles Vista, LLC, SEC
Release No. 544, 107 SEC Docket 5934, 2013 WL 6858820,
at *7 (Dec. 31, 2013). The ALJ deemed “[t]he falsity of the
representations in the emails . . . staggering” and Lorenzo’s
mental state with respect to those misstatements at least
                               6
“reckless.” Id. As a result, the ALJ ordered Lorenzo to: (i)
cease and desist from violating each securities-fraud provision
giving rise to the charges against him; (ii) forever refrain from
participating in the securities industry in several enumerated
respects; and (iii) pay a civil monetary penalty of $15,000. Id.
at *10.

     Lorenzo petitioned the Commission for review.
Following “an independent review of the record,” the full
Commission sustained the ALJ’s decision, including her
“imposition of an industry-wide bar, a cease-and-desist order,
and a $15,000 civil penalty.” Francis V. Lorenzo, SEC
Release No. 9762, 111 SEC Docket 1761, 2015 WL 1927763,
at *1 (Apr. 29, 2015) (Lorenzo). The Commission found that
Lorenzo “knew each of [the emails’ key statements] was false
and/or misleading when he sent them.” Id. It concluded that
the sanctions were “in the public interest to deter Lorenzo and
others in similar positions from committing future violations.”
Id. at *17. The Commission later denied Lorenzo’s motion
for reconsideration.

    Lorenzo filed a timely petition for review in this court.
He challenges only the Commission’s imposition of an
industry-wide bar and a $15,000 civil penalty, not the cease-
and-desist order.

                               II.

     We first consider Lorenzo’s challenges to the
Commission’s findings that the relevant statements in his
email messages were false or misleading and were made with
the requisite mental state. The three pertinent statements are
the three “layers of protection” enumerated in both of
Lorenzo’s October 14, 2009, email messages to potential
investors about the debenture offering. Lorenzo challenges
                              7
the Commission’s determination that two of the three
statements were false or misleading, and he also challenges
the Commission’s conclusion that he possessed the requisite
intent with respect to all three of the statements.

     With regard to his intent, establishing a violation of
Section 17(a)(1) of the Securities Act, Section 10(b) of the
Exchange Act, or Exchange Act Rule 10b-5 “requires proof of
scienter.” Dolphin & Bradbury, Inc. v. SEC, 512 F.3d 634,
639 (D.C. Cir. 2008). That standard in turn requires
demonstrating “an intent to deceive, manipulate, or defraud.”
Id. (quoting SEC v. Steadman, 967 F.2d 636, 641 (D.C. Cir.
1992)). The scienter requirement can be satisfied by a
showing of “[e]xtreme recklessness,” which exists when “the
danger was so obvious that the actor was aware of it and
consciously disregarded it.” Id.

     The question whether Lorenzo acted with scienter, like
the question whether the statements were false or misleading,
is a question of fact. Id. at 639. The Commission’s “factual
findings are conclusive if supported by substantial evidence.”
Seghers v. SEC, 548 F.3d 129, 132 (D.C. Cir. 2008).
Although “[s]ubstantial evidence is more than a mere
scintilla,” Kornman v. SEC, 592 F.3d 173, 184 (D.C. Cir.
2010), we have repeatedly described the standard as a “very
deferential” one, e.g., Siegel v. SEC, 592 F.3d 147, 155 (D.C.
Cir. 2010); Dolphin & Bradbury, 512 F.3d at 639; Nat’l Ass’n
of Sec. Dealers v. SEC, 801 F.2d 1415, 1419 (D.C. Cir. 1986).
Applying that standard here, we conclude that the
Commission’s findings as to falsity and scienter are supported
by substantial evidence with regard to each of the three
pertinent statements in Lorenzo’s emails.
                               8
                               A.

     The first of the three statements at issue advised potential
investors that the “Company has over $10 mm in confirmed
assets.” J.A. 794, 796. Lorenzo does not directly dispute the
falsity of that statement. Nor could he: by the time Lorenzo
sent the October 14, 2009, email messages containing that
statement, W2E had entirely written off its intangibles and
disclosed that its remaining assets were worth far less than $1
million. And Lorenzo himself testified that W2E “would be
lucky to get a million” for its intangibles after they had been
marked down. Id. at 128.

    As to the question of scienter, Lorenzo contends that,
when he sent the emails, he held a good-faith belief that W2E
had over $10 million in confirmed assets. The Commission
concluded otherwise, and its finding of scienter is supported
by substantial evidence.

     One of Lorenzo’s chief duties involved conducting due
diligence on his clients, including reviewing their financial
statements and public SEC filings. During the relevant time,
W2E was Lorenzo’s sole investment-banking client. He
knew that W2E’s financial situation was “horrible from the
beginning” and that its gas-conversion technology had not
worked as planned. Id. at 124. He also knew that he stood to
gain seven to nine percent of any funds he raised from the
debenture offering.

     The record shows that, when Lorenzo viewed W2E’s
June 2009 Form 8-K, he disbelieved the Form’s valuation of
the company’s intangible assets at $10 million. He agreed
that the intangibles were a “dead asset” that would be “hugely
discounted,” id. at 127-28, and that W2E would be “lucky [to]
get a million dollars for that asset,” id. at 128-29. He also
                               9
thought it significant that the $10 million valuation had not
been audited, because without such scrutiny, “there is way too
much risk for investors.” Id. at 126. He acknowledged that
he had warned Gregg Lorenzo as early as April 2009 to
refrain from collateralizing a debenture offering with W2E’s
intangibles, because those assets “provided no protection” to
investors. Id. at 159. Lorenzo understood that, if a default
occurred, “clients would not be able to recoup their money
based on a liquidation of this asset.” Id. He instead viewed
the debenture offering as a “toxic convertible debt spiral.”
Lorenzo, 2015 WL 1927763, at *5.

     Evidence concerning Lorenzo’s state of mind can also be
gleaned from his actions in helping prepare Charles Vista’s
Private Placement Memorandum for the debenture offering.
On August 26, 2009, he asked W2E’s principals to value the
company’s intangibles at $10 million in the upcoming
Memorandum. He received no response. He broached the
subject again on September 1, this time leaving the
intangibles’ value blank, because he “w[asn’t] sure what [it]
was worth anymore.” J.A. 135, 739. The final Memorandum
assigned no concrete value to W2E’s intangibles; it instead
divulged that the company had experienced “significant
operating losses” and did “not expect to be profitable for at
least the foreseeable future.” Lorenzo, 2015 WL 1927763, at
*3.

     In its October 1 SEC filings, W2E publicly disclosed the
wholesale write-off of its intangibles. It did so in a tri-column
chart entitled “Goodwill and Technology,” and it followed
that numerical presentation with a textual explanation for the
mark-down. Lorenzo acknowledged that he read the amended
Form 8-K on October 1 (although, according to him,
“[p]robably not as closely as I should have”). J.A. 140. And
he received an email from W2E’s CFO on October 5
                               10
succinctly contextualizing the massive devaluation of W2E’s
intangible assets.

      The evidence therefore supports concluding that, at least
by October 5, Lorenzo knew that W2E’s intangibles were
valueless. He gave testimony on the issue as follows: “Q. So
it is fair to say . . . that on October 5, 200[9], you were aware
that the $10 million asset had been written off by [W2E].
Correct? A. Okay. I will agree to that. That’s correct. Q.
That is a fair statement? A. Yes.” Id. at 151. That admission
is difficult to reconcile with Lorenzo’s statement that he
“unintentional[ly] miss[ed]” the import of the October 5
email. Id. at 148. The Commission justifiably credited his
more inculpatory rendition of events, especially in light of his
broader, scienter-related concession: “Q. [D]id you know that
those statements were inaccurate and misleading? A. Yes. Q.
You knew at the time? A. At the time? I can’t sit here and
say that I didn’t know.” Id. at 158.

     According to the Commission, “[t]hat Lorenzo could
have looked at [W2E’s] filings, which was his job, and missed
what was one of the most pertinent facts in them—the
valuation of the company’s assets—is either untrue or
extreme recklessness.” Lorenzo, 2015 WL 1927763, at *9.
The Commission considered it “at least extremely reckless”
for Lorenzo to have sent email messages claiming that W2E
had over $10 million in “confirmed” assets, given his “long-
standing concern about the legitimacy” of those assets. Id.
We perceive no basis for setting aside the Commission’s
conclusions as unsupported by substantial evidence.

    In resisting that conclusion, Lorenzo relies in part on a
$14 million valuation of W2E’s assets in a W2E research
report emailed by Charles Vista’s Chief Compliance Officer
to the firm’s brokers on the same day Lorenzo sent his
                              11
pertinent emails (October 14, 2009). The Commission
sensibly reasoned that “the mere fact that, for whatever
unknown reason, a compliance officer sent an inaccurate
research report internally to the firm’s brokers is neither
analogous to, nor an excuse for, Lorenzo’s knowingly sending
misleading emails to prospective investors.” Id. at *9 n.23.

                              B.

     The second contested statement is the assertion in
Lorenzo’s emails that “[t]he Company has purchase orders
and LOI’s for over $43 mm in orders.” J.A. 794, 796. He
maintains that the Commission erred in deeming that
statement false or misleading. He notes that, at one point,
Charles Vista did in fact receive a $43 million letter of intent
from a potential customer in the Caribbean, and that W2E’s
CEO “put a lot of confidence” in such letters. Id. at 160. But
as the Commission rightly notes, the Caribbean letter did not
obligate its drafter to do anything, and the transaction
proceeded no further. By the time Lorenzo sent his emails on
October 14, 2009, W2E had no outstanding purchase orders.
Lorenzo’s emails nonetheless assured the recipients that W2E
had over $43 million in “purchase orders and LOI’s.” The
Commission thus was fully justified in finding that statement
false or misleading. See Lorenzo, 2015 WL 1927763, at *6.

     Lorenzo also disputes the Commission’s finding of
scienter concerning the extent of W2E’s anticipated cash
flow. Asked whether he knew at the time that the $43 million
figure was misleading, Lorenzo testified as follows: “I can’t
say that with a hundred percent because they did have LOI’s
for 43 million.” J.A. 160. As his other testimony revealed,
however, Lorenzo understood that W2E’s sole letter of intent
was “non-binding,” a mere potentiality that the company
“hoped would materialize.” Id. at 162. And by September
                              12
2009, he “didn’t think that the 43 million LOI was ever going
to turn into purchases.” Id. at 164. Lorenzo testified
repeatedly to that effect. See id. at 163-64 (“Q. And by
September 2009 you didn’t think it was ever going to come
through, right? A. . . . That is correct.”); id. at 164 (“Q. So
sometime in September you lost confidence that this 43
million was ever going to happen? A. Yes.”).

     The clear implication of the statement in Lorenzo’s email
messages was that W2E anticipated a $43 million influx of
capital from past and future orders. Yet the record reveals
grave doubts on Lorenzo’s part that “$43 mm in orders” (or
any orders) would actually occur. Substantial evidence
therefore supports the Commission’s finding of scienter as to
that statement.

                              C.

     The third statement at issue is the assertion in Lorenzo’s
email messages that “Charles Vista has agreed to raise
additional monies to repay these Debenture holders (if
necessary).”     Id. at 794, 796.       Lorenzo disputes the
Commission’s conclusion that the statement was false or
misleading. He contends that Gregg Lorenzo could have
made such an agreement for Charles Vista, had done so on
prior occasions for debenture holders, and had allegedly met
with additional brokers about raising funds for W2E. The
Commission permissibly regarded those assertions as
“establish[ing] only the theoretical possibility that Charles
Vista could have raised additional money to repay investors,
not that it had agreed to do so (as Lorenzo’s emails claimed).”
Lorenzo, 2015 WL 1927763, at *7.

   With regard to scienter, Lorenzo observes that the
Commission included no specific citations to the record in
                              13
support of its finding.      It is true that, although the
Commission quoted the evidentiary record at length, it did not
cite the particular page numbers on which certain arguments
and quotations appeared. But we “uphold a decision of less
than ideal clarity if the agency’s path may reasonably be
discerned.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Bowman
Transp., Inc. v. Arkansas-Best Freight Sys., 419 U.S. 281, 286
(1974)). That standard is readily satisfied here.

     Lorenzo allowed, at least in hindsight, that “you can
interpret this [statement] as being misleading.” J.A. 167.
Moreover, according to his own testimony, at the time he sent
the emails, he did not believe Charles Vista could raise
enough money to repay debenture holders. For instance, he
testified that, as of October 2009, “it is accurate to say that
Charles Vista would not have the buying power or the
resources to properly fund [W2E] in order to repay the
debentures.” Id. at 172. Given Lorenzo’s knowledge that
Charles Vista could not have repaid debenture holders, the
Commission could certainly conclude that Lorenzo believed
that no such agreement existed. As a result, substantial
evidence supports the Commission’s finding that Lorenzo
acted with scienter with regard to the assurance to investors
that Charles Vista had made such a promise.

                             III.

    The Commission found that Lorenzo’s actions in
connection with his email messages violated Section
(17)(a)(1) of the Securities Act and Section 10(b) of the
Exchange Act, as implemented by the Commission’s Rule
10b-5.    The Rule contains three subsections, and the
Commission concluded that Lorenzo had violated all three.
                             14
     We now consider Lorenzo’s argument that he did not
“make” the relevant statements within the meaning of the
express terms of one of Rule 10b-5’s subsections, Rule 10b-
5(b). We agree with Lorenzo that, under the Supreme Court’s
decision in Janus Capital Group, Inc. v. First Derivative
Traders, 564 U.S. 135 (2011), he did not “make” the
statements at issue for purposes of Rule 10b-5(b). Even so,
we conclude that his status as a non-“maker” of the statements
under Rule 10b-5(b) does not vitiate the Commission’s
conclusion that his actions violated the other subsections of
Rule 10b-5, as well as Section 17(a)(1).

                             A.

     Under Rule 10b-5(b), it is unlawful to “make any untrue
statement of a material fact . . . in connection with the
purchase or sale of any security.” 17 C.F.R. § 240.10b-5(b).
In Janus, the Supreme Court explained what it means to
“make” a statement within the meaning of that prohibition:

       For purposes of Rule 10b-5, the maker of a
       statement is the person or entity with ultimate
       authority over the statement, including its
       content and whether and how to communicate
       it. Without control, a person or entity can
       merely suggest what to say, not “make” a
       statement in its own right. One who prepares
       or publishes a statement on behalf of another is
       not its maker.

564 U.S. at 142. “[I]n the ordinary case,” the Court
continued, “attribution within a statement or implicit from
surrounding circumstances is strong evidence that a statement
was made by—and only by—the party to whom it is
attributed.” Id. at 142-43.
                              15
     The Janus Court held that an investment adviser that had
assisted in preparing a mutual fund’s prospectuses did not
“make” the statements contained therein, because the adviser
lacked “ultimate control” over the statements’ content and
dissemination. Id. at 148. The investment adviser had merely
“participate[d] in the drafting of a false statement”—“an
undisclosed act preceding the decision of an independent
entity to make a public statement.” Id. at 145. The Court
illustrated the operation of its test through the following
analogy: “Even when a speechwriter drafts a speech, the
content is entirely within the control of the person who
delivers it. And it is the speaker who takes credit—or
blame—for what is ultimately said.” Id. at 143.

     Under the Janus test, a person cannot have “made” a
statement if he lacked ultimate authority over what it said and
whether it was said, including if he prepared or published it
on behalf of another. In light of that understanding, we find
that Lorenzo was not the “maker” of the pertinent statements
set out in the email messages he sent to potential investors,
even viewing the record in the light most favorable to the
Commission.

     Lorenzo contends that he sent the email messages at the
behest of his boss, Gregg Lorenzo, and that Gregg Lorenzo
supplied the content of the false statements, which Lorenzo
copied and pasted into the messages before distributing them.
As a result, Lorenzo contends, Gregg Lorenzo (and not
Lorenzo himself) was the “maker” of the statements under
Janus. The Commission found otherwise, concluding that
Lorenzo “was ultimately responsible for the emails’ content
and dissemination.” Lorenzo, 2015 WL 1927763, at *10. We
cannot sustain the Commission’s conclusion that Lorenzo had
“ultimate authority” over the false statements under Janus.
                              16
564 U.S. at 142. Gregg Lorenzo, and not Lorenzo, retained
ultimate authority.

      Voluminous testimony established that Lorenzo
transmitted statements devised by Gregg Lorenzo at Gregg
Lorenzo’s direction. For instance, Lorenzo said: “I cut and
paste[d] an e-mail and sent it to [investors],” J.A. 153; “I was
asked to send these e-mails out by Gregg Lorenzo,” id. at 156;
and “I cut and pasted and sent it,” id. at 157. He also stated:
“I remember getting—getting the e-mail address from [Gregg
Lorenzo] and then cut and past[ed] this—this thing and sent
it,” id. at 199; “[Gregg Lorenzo] gave me the e-mail address, I
typed it into the ‘to’ column and cut and pasted this—the
content and sent it out,” id.; “My boss asked me to send these
e-mails out and I sent them out,” id. at 200; “[I] sent these e-
mails out at the request of my superior,” id. at 208; and “I
simply was asked to send the e-mail out,” id. at 208-09.

     In the face of that consistent testimony, the Commission
anchored its conclusion almost entirely in the following
remark from Lorenzo: “If memory serves me—I think I
authored it and then it was approved by Gregg and Mike
[Molinaro, Charles Vista’s Chief Compliance Officer].” J.A.
155. That assertion, even apart from its equivocation, must be
read alongside the rest of Lorenzo’s testimony. Immediately
before and after uttering that line, Lorenzo explained that “I
cut and paste[d] an e-mail and sent it” and “I cut and pasted
and sent it.” Id. at 153, 157. And he consistently testified to
the same effect throughout. In that light, Lorenzo’s remark
that he “authored” the emails cannot bear the weight given it
by the Commission. Rather, the statement is fully consistent
with Lorenzo’s repeated account that, while he produced the
email messages for final distribution from himself to the
investors—and in that sense “authored” the messages—he
populated the messages with content sent by Gregg Lorenzo.
                              17
     In the line of testimony on which the Commission relies,
moreover, Lorenzo stated that, before he sent the messages,
they were “approved” by Gregg Lorenzo. That observation
reinforces Gregg Lorenzo’s ultimate authority over the
substance and distribution of the emails: Gregg Lorenzo
asked Lorenzo to send the emails, supplied the central
content, and approved the messages for distribution. To be
sure, Lorenzo played an active role in perpetrating the fraud
by producing the emails containing the false statements and
sending them from his account in his capacity as director of
investment banking (and doing so with scienter). But under
the test set forth in Janus, Gregg Lorenzo, and not Lorenzo,
was “the maker” of the false statements in the emails. 564
U.S. at 142.

    The Commission’s remaining observations do not alter
our conclusion. For instance, the Commission noted that
Lorenzo “put his own name and direct phone number at the
end of the emails, and he sent the emails from his own
account.” Lorenzo, 2015 WL 1927763, at *10. That sort of
signature line, however, can often exist when one person
sends an email that “publishes a statement on behalf of
another,” with the latter person retaining “ultimate authority
over the statement.” Janus, 564 U.S. at 142.

     The Commission also referenced Lorenzo’s testimony
that “he did not recall ever discussing either of the emails or
their subject matter with Gregg Lorenzo.” Lorenzo, 2015 WL
1927763, at *10. That comment, however, is consistent with
the understanding that Lorenzo played a minimal role in
devising the emails’ false statements. And although the email
messages said that the Investment Banking Division—which
Lorenzo headed—was “summariz[ing] several key points”
about the debenture offering, J.A. 794, 796, the content of
those points evidently had been supplied by Gregg Lorenzo.
                               18
The emails, moreover, began by stating that they were being
sent at Gregg Lorenzo’s request. Lorenzo testified elsewhere
that Gregg Lorenzo had remarked, “I want this [to] come
from our investment banking division. Can you send this out
for me?” Id. at 217.

     Under the Supreme Court’s decision in Janus, in short,
Lorenzo cannot be considered to have been “the maker” of the
statements in question for purposes of Rule 10b-5(b)—i.e.,
“the person . . . with ultimate authority” over them. 564 U.S.
at 142. That person was Gregg Lorenzo, and not (or not also)
Lorenzo.

                               B.

     Lorenzo next argues that, if he was not “the maker” of
the false statements at issue within the meaning of Rule 10b-
5(b), his conduct necessarily also falls outside the prohibitions
of Exchange Act Section 10(b), Rules 10b-5(a) and (c), and
Securities Act Section 17(a)(1). The Commission concluded
otherwise, incorporating by reference its reasoning in John P.
Flannery & James D. Hopkins, SEC Release No. 3981, 110
SEC Docket 2463, 2014 WL 7145625 (Dec. 15, 2014),
vacated, Flannery v. SEC, 810 F.3d 1 (1st Cir. 2015)
(rejecting the Commission’s key factual determinations on
substantial-evidence grounds). The Commission determined
that, “[i]ndependently of whether Lorenzo’s involvement in
the emails amounted to ‘making’ the misstatements for
purposes of Rule 10b-5(b), he knowingly sent materially
misleading language from his own email account to
prospective investors,” thereby violating those other
provisions. Lorenzo, 2015 WL 1927763, at *11.

    We sustain the Commission’s conclusion to that effect.
At least in the circumstances of this case, in which Lorenzo
                              19
produced email messages containing false statements and sent
them directly to potential investors expressly in his capacity
as head of the Investment Banking Division—and did so with
scienter—he can be found to have infringed Section 10(b),
Rules 10b-5(a) and (c), and Section 17(a)(1), regardless of
whether he was the “maker” of the false statements for
purposes of Rule 10b-5(b).

     1. Rules 10b-5(a) and (c), along with Sections 10(b) and
17(a)(1)—all unlike Rule 10b-5(b)—do not speak in terms of
an individual’s “making” a false statement. Indeed, “[t]o
make any . . . statement” was the critical language construed
in Janus: what the Court described as the “phrase at issue.”
564 U.S. at 142 (alteration in original) (quoting 17 C.F.R.
§ 240.10b-5(b)). That language appears in Rule 10b-5(b), but
not in the other provisions Lorenzo was found to have
violated.

     In particular, Rule 10b-5(a) prohibits “employ[ing] any
device, scheme, or artifice to defraud . . . in connection with
the purchase or sale of any security.” 17 C.F.R. § 240.10b-
5(a). And Rule 10b-5(c) bars “engag[ing] in any act, practice,
or course of business which operates or would operate as a
fraud or deceit upon any person . . . in connection with the
purchase or sale of any security.” Id. § 240.10b-5(c).
Consequently, Rule 10b-5(b) “specifies the making of an
untrue statement of a material fact and the omission to state a
material fact. The first and third subparagraphs are not so
restricted.” Affiliated Ute Citizens of Utah v. United States,
406 U.S. 128, 152-53 (1972).

    Nor are Securities Act Section 17(a)(1) and Exchange
Act Section 10(b). Section 17(a)(1) makes it unlawful “to
employ any device, scheme, or artifice to defraud” in offering
or selling a security. 15 U.S.C. § 77q(a)(1). And Section
                              20
10(b) forbids “us[ing] or employ[ing] . . . any manipulative or
deceptive device or contrivance” in contravention of rules
prescribed by the Commission. 15 U.S.C. § 78j(b).

     Here, Lorenzo, acting with scienter (i.e., an intent to
deceive or defraud, or extreme recklessness to that effect),
produced email messages containing three false statements
about a pending offering, sent the messages directly to
potential investors, and encouraged them to contact him
personally with any questions. Although Lorenzo does not
qualify as the “maker” of those statements under Janus
because he lacked ultimate authority over their content and
dissemination, his own active “role in producing and sending
the emails constituted employing a deceptive ‘device,’ ‘act,’
or ‘artifice to defraud’ for purposes of liability under Section
10(b), Rule 10b-5(a) and (c), and Section 17(a)(1).” Lorenzo,
2015 WL 1927763, at *11.

     Lorenzo’s conduct fits comfortably within the ordinary
understanding of those terms. Indeed, he presents no
argument that his actions fail to satisfy the statutory and
regulatory language.     He does not examine—or even
reference—the text of those provisions in arguing that they
should be deemed not to apply to his conduct.

    Lorenzo does not contend before us, for instance, that he
simply passed along information supplied by Gregg Lorenzo
without pausing to think about the truth or falsity of what he
was sending to investors. If those were the facts, he might
attempt to argue that he cannot be considered to have
“employed” any fraudulent device or artifice, or “engaged” in
any fraudulent or deceitful act, within the meaning of Rules
10b-5(a) and (c), and of Sections 10(b) and 17(a)(1). But
while Lorenzo argued before the Commission that he
produced and sent the emails at Gregg Lorenzo’s request
                              21
without giving them thought, the Commission found
“implausible” any suggestion that he merely passed along the
messages in his own name without thinking about their
content. Lorenzo, 2015 WL 1927763, at *9. Lorenzo does
not challenge that finding here.

     We therefore consider the case on the understanding that
Lorenzo, having taken stock of the emails’ content and having
formed the requisite intent to deceive, conveyed materially
false information to prospective investors about a pending
securities offering backed by the weight of his office as
director of investment banking. On that understanding, the
language of Sections 10(b) and 17(a)(1), and of Rules 10b-
5(a) and (c), readily encompasses Lorenzo’s actions.

     2. Instead of presenting any argument that his conduct
falls outside the language of those provisions, Lorenzo asserts
that, if he could be found to have violated the provisions, the
decision in Janus would effectively be rendered meaningless.
See SEC v. Kelly, 817 F. Supp. 2d 340, 344 (S.D.N.Y. 2011).
He notes the Janus Court’s interest in interpreting the term
“make” in a manner that would avoid undermining the
Court’s previous holding that private actions under Rule 10b-
5 cannot be premised on conceptions of secondary (i.e.,
aiding-and-abetting) liability. See Janus, 564 U.S. at 143
(discussing Central Bank of Denver, N.A. v. First Interstate
Bank of Denver, N.A., 511 U.S. 164 (1994)).

     As the Court explained in Janus, whereas the
Commission can bring actions under Rule 10b-5 based on an
aiding-and-abetting theory, private parties—after Central
Bank—cannot. Id. The Janus Court reasoned that a “broader
reading of ‘make,’” encompassing “persons or entities
without ultimate control over the content of a statement,”
could mean that “aiders and abettors would be almost
                               22
nonexistent.” Id. That result, the Court believed, would have
undercut an implicit understanding from Central Bank: that
“there must be some distinction between those who are
primarily liable . . . and those who are secondarily liable.” Id.
at 143 n.6. The same considerations, Lorenzo contends,
should weigh in favor of concluding that his conduct did not
violate Section 10(b), Rules 10b-5(a) and (c), and Section
17(a)(1). We are unpersuaded.

     To the extent the Janus Court’s concerns about aiding-
and-abetting liability in private actions under Rule 10b-5(b)
should inform our interpretation of those other four
provisions, the conduct at issue in Janus materially differs
from Lorenzo’s actions in this case. Janus involved an
investment adviser that initially drafted false statements
which an independent entity subsequently decided to
disseminate to investors in its own name. The investment
adviser’s role in originally devising the statements was
unknown to the investors who ultimately received them. The
Court thus described the investment adviser’s conduct as “an
undisclosed act preceding the decision of an independent
entity to make a public statement.” 564 U.S. at 145.

     In this case, by contrast, Lorenzo’s role was not
“undisclosed” to investors. The recipients were fully alerted
to his involvement: Lorenzo sent the emails from his account
and under his name, in his capacity as director of investment
banking at Charles Vista. While Gregg Lorenzo supplied the
content of the false statements for inclusion in Lorenzo’s
email messages, Lorenzo effectively vouched for the emails’
contents and put his reputation on the line by listing his
personal phone number and inviting the recipients to “call
with any questions.”       J.A. 794, 796.       Nor did the
dissemination of the false statements to investors result only
from the separate “decision of an independent entity.” Janus,
                               23
564 U.S. at 145. Lorenzo himself communicated with
investors, directly emailing them misstatements about the
debenture offering.

     Unlike in Janus, therefore, the recipients of Lorenzo’s
emails were not exposed to the false information only through
the intervening act of “another person.” Id. For the same
reasons, Lorenzo’s conduct also differs from the actions
considered in Stoneridge Investment Partners, LLC v.
Scientific-Atlanta, Inc., 552 U.S. 148 (2008). There, the
Supreme Court held that parties who allegedly played a role
in a scheme to make false statements to investors could not be
held liable in a private action under Rule 10b-5. The Court
explained that the parties’ acts “were not disclosed to the
investing public” and they “had no role” in “disseminating”
the misstatements in question. Id. at 155, 161. Lorenzo,
unlike the defendants in Janus and Stoneridge, transmitted
misinformation directly to investors, and his involvement was
transparent to them.

     As a result, insofar as the Janus Court declined to bring
the investment adviser’s actions in that case within the fold of
Rule 10b-5 because doing so might reach too many persons
fairly considered to be aiders and abettors, the same is not true
of Lorenzo’s distinct conduct in this case. The Court’s
concern that “aiders and abettors would be almost
nonexistent” if a private action under Rule 10b-5 reached “an
undisclosed act preceding the decision of an independent
entity to make a public statement,” Janus, 564 U.S. at 143,
145, need not obtain in the case of a person’s self-attributed
communications sent directly to investors (and backed by
scienter). Lorenzo’s actions thus can form the basis of a
violation of Rules 10b-5(a) and (c) (as well as Sections 10(b)
and 17(a)(1)) while still leaving ample room for “distinction
between those who are primarily liable . . . and those who are
                              24
secondarily liable.” Id. at 143 n.6; see Stoneridge, 552 U.S. at
166 (“[T]he implied right of action in § 10(b) continues to
cover secondary actors who commit primary violations.”
(citing Central Bank, 511 U.S. at 191)).

     3. Lorenzo intimates more broadly that actions involving
false statements must fit within Rule 10b-5(b) and cannot be
brought separately under Rules 10b-5(a) or (c) (or Section
17(a)(1)). We know of no blanket reason, however, to treat
the various provisions as occupying mutually exclusive
territory, such that false-statement cases must reside
exclusively within the province of Rule 10b-5(b). And any
suggestion that the coverage of Rule 10b-5(b) must be distinct
from that of Rules 10b-5(a) and (c) presumably would mean
that each of the latter two provisions likewise must occupy
entirely separate ground from one another. In our view,
however, the provisions’ coverage may overlap in certain
respects.

     Significantly, the Supreme Court recently described Rule
10b-5 in a manner confirming that conduct potentially subject
to Rule 10b-5(b)’s bar against making false statements can
also fall within Rule 10b-5(a)’s more general prohibition
against employing fraudulent devices: the Court explained
that “Rule 10b-5 . . . forbids the use of any ‘device, scheme,
or artifice to defraud’ (including the making of any ‘untrue
statement of material fact’ or any similar ‘omi[ssion]’).”
Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058, 1063
(2014) (emphasis added).

     The Court has also held that, although Section 14 of the
Exchange Act establishes “a complex regulatory scheme
covering proxy solicitations,” the inapplicability of Section 14
to false statements in proxy materials does not preclude the
application of Rule 10b-5 to the same statements. SEC v.
                              25
Nat’l Sec., Inc., 393 U.S. 453, 468 (1969). “The fact that
there may well be some overlap is neither unusual nor
unfortunate,” the Court explained. Id. Here, correspondingly,
Rules 10b-5(a) and (c), as well as Sections 10(b) and 17(a)(1),
may encompass certain conduct involving the dissemination
of false statements even if the same conduct lies beyond the
reach of Rule 10b-5(b).

     In accordance with that understanding, a number of
decisions have held that securities-fraud allegations involving
misstatements can give rise to liability under related
provisions even if the conduct in question does not amount to
“making” a statement under Janus. See, e.g., SEC v. Big
Apple Consulting USA, Inc., 783 F.3d 786, 795-96 (11th Cir.
2015); SEC v. Monterosso, 756 F.3d 1326, 1334 (11th Cir.
2014); SEC v. Benger, 931 F. Supp. 2d 904, 905-06 (N.D. Ill.
2013); SEC v. Familant, 910 F. Supp. 2d 83, 93-95 (D.D.C.
2012); SEC v. Stoker, 865 F. Supp. 2d 457, 464-65 (S.D.N.Y.
2012). We reach the same conclusion here with respect to the
role played by Lorenzo in disseminating the false statements
in his email messages to investors.

     4. Our dissenting colleague would find that Lorenzo’s
actions did not violate Rules 10b-5(a) or (c), or Sections 10(b)
or 17(a)(1). He advances two reasons for reaching that
conclusion, each of which, in our respectful view, is
misconceived.

     a. The dissent’s central submission is that Lorenzo acted
without any intent to deceive or defraud. As our colleague
sees things, Lorenzo simply transmitted false statements
supplied by Gregg Lorenzo without giving any thought to
their content. See infra at 1, 6 (Kavanaugh, J., dissenting).
And Lorenzo ostensibly paid no attention to the content of the
statements he sent even though: he included the statements in
                              26
messages he produced for distribution from his own email
account; he sent the statements in his name and capacity as
investment banking director; and he encouraged the recipients
to contact him personally with questions about the content.
Under our colleague’s understanding, that is, Lorenzo offered
to answer any questions about his emails even though he had
supposedly paid no attention to what they said.

     In adopting that understanding, the dissent relies on a
finding by the ALJ that Lorenzo sent the emails without
thinking about their contents. But the Commission, as we
have noted, rejected the ALJ’s conclusion to that effect as
“implausible” in the circumstances. Lorenzo, 2015 WL
1927763, at *9. In our colleague’s view, the court should
accept the ALJ’s finding, notwithstanding the Commission’s
rejection of it, because the ALJ could assess Lorenzo’s
credibility as a witness.

     The dissent’s (and ALJ’s) factual understanding,
however, is contradicted by Lorenzo’s own account of his
mental state to this court. Lorenzo raises no challenge to the
Commission’s rejection of any notion that he paid no heed to
his messages’ content. What is more, his argument on the
issue of scienter rests on his affirmative contemplation—
indeed, his ratification—of the content of his emails.

     Unlike in his arguments before the ALJ and Commission,
Lorenzo, in this court, does not take the position that he
simply passed along statements supplied by Gregg Lorenzo
without thinking about them. Such a suggestion appears
nowhere in his briefing. To the contrary, he argues that, “[a]t
the time the email was sent [he] believed the statements to be
true and he did not act with scienter.” Pet’r Reply Br. 6
(emphasis added). He further asserts that he “had a good
faith belief in the veracity of the statements contained in the
                              27
email that was drafted by Gregg Lorenzo.” Pet’r Opening Br.
18 (emphasis added); id. at 22 (“Petitioner had a good faith
belief in the accuracy of the statements contained in the
email.”). He then attempts to explain why he could have
believed the truth of the materially misleading statements
contained in his email messages, arguments that we have
already rejected in affirming the Commission’s findings of
scienter. See supra Part II.

     For present purposes, what matters is that a person cannot
have “believed statements to be true” at the time he sent them,
or possessed a “good faith belief in their veracity,” if he had
given no thought to their content in the first place. In that
light, our dissenting colleague relies on an account of
Lorenzo’s state of mind that stands in opposition to Lorenzo’s
account to us of his own state of mind. (As for our
colleague’s theory that Lorenzo could have formed a belief
about the statements’ truthfulness without even reading them,
based purely on his trust of Gregg Lorenzo, see infra at 7 n.1
(Kavanaugh, J., dissenting), even if we assume that theory
were viable as a conceptual matter, Lorenzo’s arguments to us
about his belief in the statements’ truth rest solely on their
content, not on any trust-without-verifying level of confidence
in Gregg Lorenzo’s veracity. Indeed, he testified that, at least
as of November 2009, “there is no way on God’s green earth
[he] thought Gregg Lorenzo was an honest guy.” J.A. 176.)

     Perhaps Lorenzo concluded he could not overcome the
Commission’s assessment that it would be implausible to
suppose he had blinded himself to the statements’ content
before sending them to investors and offering to answer any
questions about them. Or perhaps he determined that, insofar
as he did so, he would have difficulty denying that he had
acted with extreme recklessness—and therefore with
scienter—in any event. Regardless, Lorenzo now takes the
                              28
position that he took stock of the content of the statements, so
much so that he formed a belief as to their truthfulness. And
we are in no position to embrace an understanding of
Lorenzo’s mental state that is disclaimed by Lorenzo himself.

     To be clear, the point here is not that Lorenzo failed to
preserve an argument about scienter. Lorenzo devoted
considerable attention to the issue of scienter in his briefing.
But Lorenzo’s arguments on the issue contain no suggestion
that he sent his emails without giving thought to their
contents. He instead contends he did think about the contents
(and reasonably believed them to be truthful). In those
circumstances, we do not so much defer to the Commission’s
assessment of Lorenzo’s state of mind over the ALJ’s finding
that Lorenzo gave no thought to his emails’ content. Rather,
we accede to Lorenzo’s account of his own mental state,
which is incompatible with the finding of the ALJ.

     But what if Lorenzo in fact had sought to argue to us, in
concert with the ALJ’s finding, that he gave no thought to the
content of his email messages when sending them? In that
event—which, again, is not the situation we face—the issue
for us would have been whether the Commission’s contrary
conclusion is supported by substantial evidence, not whether
the Commission or the ALJ has the better of the dispute
between them on the matter. See, e.g., Kay v. FCC, 396 F.3d
1184, 1189 (D.C. Cir. 2005); Swan Creek Communications,
Inc. v. FCC, 39 F.3d 1217, 1221 (D.C. Cir. 1994); see also
Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 (1951).

     The Commission’s finding meets the deferential,
substantial-evidence standard. After all, Lorenzo’s emails
marked the only time he communicated directly with
prospective investors, the emails concerned a securities
offering by his sole investment banking client, the emails said
                               29
he would personally answer questions about their content, and
the emails carried his professional imprimatur as director of
investment banking—all of which support the Commission’s
rejection of the idea that Lorenzo simply sent his emails
without taking any stock of what they said.

     b. Even accepting that Lorenzo thought about the
statements in his emails and sent them with an intent to
deceive, the dissent would still conclude that Lorenzo’s
conduct falls outside the ambit of Rules 10b-5(a) and (c), and
Sections 10(b) and 17(a)(1). See infra at 9 (Kavanaugh, J.,
dissenting). Our colleague grounds that conclusion in his
agreement with the proposition put forward by certain other
courts of appeals to the effect that “scheme liability”—i.e., the
conduct prohibited by Rules 10b-5(a) and (c)—requires
something more than false or misleading statements. See
Pub. Pension Fund Grp. v. KV Pharma. Co., 679 F.3d 972,
987 (8th Cir. 2012); WPP Luxembourg Gamma Three Sari v.
Spot Runner, Inc., 655 F.3d 1039, 1057-58 (9th Cir. 2011);
Lentell v. Merill Lynch & Co., 396 F.3d 161, 177 (2d Cir.
2005).

     Our colleague appears to read those decisions’ embrace
of that proposition to rest on the need to maintain a distinction
between primary liability and secondary liability under Rule
10b-5. We have described the Janus Court’s reliance on that
concern and explained our conclusion that it does not carry
the day in the specific circumstances of Lorenzo’s conduct.
See supra Part III.B.2.

     Moreover, we do not read the referenced courts of
appeals’ decisions to rest on concerns about preserving a
distinction between primary and secondary liability. None of
those decisions discusses (or mentions) the concepts of
primary and secondary liability or any need to maintain a
                                30
separation between them. Indeed, two of the three decisions
postdate Janus, yet neither cites Janus, much less invokes
Janus’s concerns with construing the scope of Rule 10b-5(b)
in a manner that would encompass too many aiders-and-
abettors.

     In addition, it is far from clear that the rule articulated by
those decisions could suitably be grounded in concerns with
preserving a distinction between primary and secondary
liability. According to the decisions, a “defendant may only
be liable as part of a fraudulent scheme based upon
misrepresentations and omissions under Rules 10b-5(a) or (c)
when the scheme also encompasses conduct beyond those
misrepresentations or omissions.” WPP Luxembourg, 655
F.3d at 1057; see KV Pharma., 679 F.3d at 987; Lentell, 396
F.3d at 177. That understanding would be overinclusive if the
objective in fact were to assure that aiders-and-abettors are
not held primarily liable under those provisions.

     Consider, for instance, the facts of WPP Luxembourg.
There, the plaintiffs alleged sufficient facts to make out a
claim of materially misleading omissions under Rule 10b-
5(b). 655 F.3d at 1051. There was no question that the
defendants faced primary (not secondary) liability if the facts
as pleaded were proved. Id. Yet the court held that the
defendants could not be liable under Rules 10b-5(a) or (c)
because there were no allegations against them apart from
misstatements or omissions. Id. at 1057-58. The court’s
requirement that plaintiffs prove more than misstatements
thus barred liability under those provisions even though there
could have been no concerns about blurring the distinction
between primary and secondary liability. Perhaps it is
unsurprising, then, that, while Lorenzo relies on the
importance of maintaining the primary-secondary liability
                              31
distinction, he makes no reference to WPP Luxembourg or the
other two decisions in his briefing.

     For those reasons, we disagree with our dissenting
colleague’s suggestion that our holding conflicts with those
decisions with regard to the primary-secondary liability
distinction. See infra at 9 (Kavanaugh, J., dissenting). We do
not understand those decisions to turn on that distinction.

     Those decisions do generally state, however, that Rules
10b-5(a) and (c) require something more than misstatements.
But they did not have occasion to elaborate on that
understanding to any significant extent—including,
importantly for purposes of this case, whether the same
interpretation would extend to Section 17(a)(1). Insofar as
those courts of appeals would find Lorenzo’s actions to lie
beyond the reach of those provisions, we read the provisions
differently.    Lorenzo’s particular conduct, as we have
explained, fits comfortably within the language of Rules 10b-
5(a) and (c), along with that of Sections 10(b) and 17(a)(1).

     Finally, we briefly respond to our dissenting colleague’s
belief that there is an incongruity in deciding both that
Lorenzo was not a maker of the false statements under Rule
10b-5(b) and that he nonetheless employed a fraudulent
device and engaged in a fraudulent act under Rules 10b-5(a)
and (c) and Section 17(a)(1). See infra at 11 (Kavanaugh, J.,
dissenting). Those combined decisions, in our view, follow
naturally from the terms of the provisions. Lorenzo was not
the “maker” of the false statements because he lacked
ultimate authority over them. Still, he “engaged” in a
fraudulent “act” and “employed” a fraudulent “device” when,
with knowledge of the statements’ falsity and an intent to
deceive, he sent the statements to potential investors carrying
his stamp of approval as investment banking director. One
                              32
can readily imagine persons whose ministerial acts in
connection with false statements would fail to qualify either
as “making” the statements or as “employing” any fraudulent
device. Lorenzo, in our view, is not such a person.

                              IV.

    Lorenzo’s final challenge concerns the sanctions imposed
against him. The Commission permanently barred Lorenzo
“from association with any broker, dealer, investment adviser,
municipal securities dealer, municipal advisor, transfer agent,
or nationally recognized statistical rating organization and
from participating in an offering of penny stocks.” Lorenzo,
2015 WL 1927763, at *17. The Commission also ordered
him to pay a $15,000 monetary penalty. Lorenzo argues that
those penalties are arbitrary and capricious for various
reasons, including that they are disproportional to the severity
of his misconduct and to the sanctions imposed in similar
cases.

     We decline to reach the merits of Lorenzo’s challenges.
The Commission chose the level of sanctions based in part on
a misimpression that Lorenzo was the “maker” of false
statements in violation of Rule 10b-5(b). Because we have
now overturned the Commission’s finding of liability under
Rule 10b-5(b), we vacate the sanctions and remand the matter
to enable the Commission to reconsider the appropriate
penalties.

     We have no assurance that the Commission would have
imposed the same level of penalties in the absence of its
finding of liability for making false statements under Rule
10b-5(b). The Commission expressly grounded its sanctions
on its perceptions about the “egregiousness of Lorenzo’s
conduct” and the “degree of scienter involved,” as well as the
                             33
need to deter others “from engaging in similar misconduct.”
Id. at *12, *14. But the Commission operated under the
assumption that Lorenzo devised, and had ultimate authority
over, the substance of the false statements contained in the
email messages he sent to investors. That assumption, as we
have concluded, is unsupported by the record evidence. The
Commission in fact specifically based its sanctions in some
measure on a belief that Lorenzo improperly sought to “shift
blame” by asserting “that he sent the emails at Gregg
Lorenzo’s direction.” Id. at *13. But as the record indicates,
that is essentially what happened.

     Because we “cannot be certain what role, if any,” the
Commission’s misperception that Lorenzo was the “maker”
of the false statements ultimately played in its choice of
sanctions, “we must remand” to enable it to reassess the
appropriate penalties. Alliance for Cannabis Therapeutics v.
DEA, 930 F.2d 936, 940-41 (D.C. Cir. 1991). When the
Commission does so under a correct understanding about the
nature of Lorenzo’s misconduct, it can assess “whether the
sanction is out of line with the agency’s decisions in other
cases” involving comparable misconduct—which, as we have
observed, is one consideration informing review of penalties
for arbitrariness and capriciousness. Collins v. SEC, 736 F.3d
521, 526 (D.C. Cir. 2013).

     The Commission, in this regard, notes our previous
observation that the “Commission is not obligated to make its
sanctions uniform, so we will not compare this sanction to
those imposed in previous cases.” Geiger v. SEC, 363 F.3d
481, 488 (D.C. Cir. 2004) (citing Butz v. Glover Livestock
Comm’n Co., 411 U.S. 182, 186-87 (1973)). In that vein, we
have explained that a mere absence of uniformity will not
necessarily render a particular action “unwarranted in law,”
id. at 488, or “unwarranted as a matter of policy,” Kornman,
                             34
592 F.3d at 188. But we have never declined to compare
past-and-present Commission sanctions in the context of an
arbitrary-and-capricious challenge. In fact, our decision in
Collins clarified that such a challenge may be brought to
review the propriety of the Commission’s choice of sanction
in a given case as compared with sanctions in comparable
situations. See 736 F.3d at 526.

                    *    *   *    *   *

     For the foregoing reasons, we grant the petition for
review in part, vacate the sanctions imposed by the
Commission, and remand the matter for further consideration.

                                                So ordered.
     KAVANAUGH, Circuit Judge, dissenting: Suppose you
work for a securities firm. Your boss drafts an email message
and tells you to send the email on his behalf to two clients. You
promptly send the emails to the two clients without thinking
too much about the contents of the emails. You note in the
emails that you are sending the message “at the request” of your
boss. It turns out, however, that the message from your boss to
the clients is false and defrauds the clients out of a total of
$15,000. Your boss is then sanctioned by the Securities and
Exchange Commission (as is appropriate) for the improper
conduct.

     What about you? For sending along those emails at the
direct behest of your boss, are you too on the hook for the
securities law violation of willfully making a false statement or
willfully engaging in a scheme to defraud?

     According to the SEC, the answer is yes. And the SEC
concludes that your behavior – in essence forwarding emails
after being told to do so by your boss – warrants a lifetime
suspension from the securities profession, on top of a monetary
fine.

     That is what happened to Frank Lorenzo in this case. The
good news is that the majority opinion vacates the lifetime
suspension. The bad news is that the majority opinion –
invoking a standard of deference that, as applied here, seems
akin to a standard of “hold your nose to avoid the stink” –
upholds much of the SEC’s decision on liability. I would
vacate the SEC’s conclusions as to both sanctions and liability.
I therefore respectfully dissent.

                           *   *    *

     The SEC initiated an enforcement action against Frank
Lorenzo and his boss. The boss eventually reached a
settlement agreement with the SEC. Apparently thinking he
                                2
had done little wrong by merely sending emails to two clients
at the request of his boss, Lorenzo did not settle.

    The case then proceeded through three stages: a trial
before an SEC administrative law judge, review by the
Commission itself, and then review by this Court. To
understand my disagreement with the majority opinion, it is
necessary to describe all three acts in this drama.

          Act One: The Administrative Law Judge

     The case proceeded to trial before an administrative law
judge. This was not your usual trial. Surprisingly, the SEC did
not present testimony from Lorenzo’s boss or from anyone else
at the securities firm where Lorenzo worked. Instead, only
Lorenzo testified about the extent of his involvement in
drafting and sending the emails.

     After hearing Lorenzo’s testimony and weighing his
credibility, the judge concluded that Lorenzo’s boss had
“drafted” the emails in question and that Lorenzo’s boss had
“asked” Lorenzo to send the emails to two clients. ALJ Op. at
5 (Dec. 31, 2013), J.A. 906. The judge also concluded that
Lorenzo did not read the text of the emails and that Lorenzo
“sent the emails without even thinking about the contents.” Id.
at 7, J.A. 908; see id. at 9, J.A. 910 (“Had he taken a minute to
read the text . . .”). Furthermore, the judge noted that the emails
themselves expressly stated that they were being sent at “the
request” of Lorenzo’s boss. Id. at 5, J.A. 906.

     Those factual findings were very favorable to Lorenzo and
should have cleared Lorenzo of any serious wrongdoing under
the securities laws. At most, the judge’s factual findings may
have shown some mild negligence on Lorenzo’s part. The
judge, however, went much further than that. The judge
                                3
somehow concluded that those findings of fact demonstrated
that Lorenzo willfully violated the securities laws – meaning
that Lorenzo acted with an intent to deceive, manipulate, or
defraud. (A finding of willfulness, as opposed to a finding of
negligence, matters because it subjects a defendant to much
higher penalties.) As a sanction, the judge not only fined
Lorenzo, but also imposed a lifetime suspension that prevents
Lorenzo from ever again working in the securities industry.

     The administrative law judge’s factual findings and legal
conclusions do not square up. If Lorenzo did not draft the
emails, did not think about the contents of the emails, and sent
the emails only at the behest of his boss, it is impossible to find
that Lorenzo acted “willfully.” That is Mens Rea 101.
Establishing that a defendant acted willfully in this context
requires proof at least of the defendant’s “intent to deceive,
manipulate, or defraud.” Dolphin & Bradbury, Inc. v. SEC,
512 F.3d 634, 639 (D.C. Cir. 2008) (internal quotation marks
omitted). How could Lorenzo have intentionally deceived the
clients when he did not draft the emails, did not think about the
contents of the emails, and sent the emails only at his boss’s
direction?

     The administrative law judge’s decision in this case
contravenes basic due process. A finding that a defendant
possessed the requisite mens rea is essential to preserving
individual liberty. See, e.g., Morissette v. United States, 342
U.S. 246, 250-51, 263 (1952); see also United States v.
Burwell, 690 F.3d 500, 527 (D.C. Cir. 2012) (en banc)
(Kavanaugh, J., dissenting); United States v. Moore, 612 F.3d
698, 703 (D.C. Cir. 2010) (Kavanaugh, J., concurring); Bluman
v. FEC, 800 F. Supp. 2d 281, 292 (D.D.C. 2011) (three-judge
panel). As Justice Jackson explained: “The contention that an
injury can amount to a crime only when inflicted by intention
is no provincial or transient notion. It is as universal and
                               4
persistent in mature systems of law as belief in freedom of the
human will and a consequent ability and duty of the normal
individual to choose between good and evil. A relation
between some mental element and punishment for a harmful
act is almost as instinctive as the child’s familiar exculpatory
‘But I didn’t mean to.’” Morissette, 342 U.S. at 250-51
(footnote omitted).

    The administrative law judge’s opinion in this case did not
heed those bedrock mens rea principles. Given the judge’s pro-
Lorenzo findings of fact, a legal conclusion that Lorenzo
“willfully” violated the securities laws makes a hash of the term
“willfully,” and of the deeply rooted principle that punishment
must correspond to blameworthiness based on the defendant’s
mens rea.

   Act Two: The Securities and Exchange Commission

    Fast forward to the Securities and Exchange Commission,
which heard the appeal of the administrative law judge’s
decision. Surely the Commission would realize that the
administrative law judge’s factual findings did not support the
judge’s legal conclusions and sanctions?

     And indeed, the Commission did come to that realization.
But instead of vacating the order against Lorenzo, the
Commission did something quite different and quite
remarkable. In a Houdini-like move, the Commission rewrote
the administrative law judge’s factual findings to make those
factual findings correspond to the legal conclusion that
Lorenzo was guilty and deserving of a lifetime suspension.

    Recall what the administrative law judge found: that
Lorenzo’s boss “drafted” the emails, that Lorenzo did not think
about the contents of the emails, and that Lorenzo sent the
                               5
emails only after being asked to do so by his boss. ALJ Op. at
5, J.A. 906. The judge reached those conclusions only after
hearing Lorenzo testify and assessing his credibility in person.

     Without hearing from Lorenzo or any other witnesses, the
Commission simply swept the judge’s factual and credibility
findings under the rug. The Commission concluded that
Lorenzo himself was “responsible” for the emails’ contents. In
the Matter of Francis V. Lorenzo, Securities Act Release No.
9762, Exchange Act Release No. 74836 at 16 (Apr. 29, 2015),
J.A. 930. How did the Commission magically explain its
decision to discard the administrative law judge’s findings of
fact? Easy. In a footnote, the Commission said that it did not
need to “blindly” accept the administrative law judge’s factual
findings and credibility judgments. Id. at 16 n.32, J.A. 930
n.32. Voila.

    The Commission’s handiwork in this case is its own
debacle. Faced with inconvenient factual findings that would
make it hard to uphold the sanctions against Lorenzo, the
Commission – without hearing any testimony – simply
manufactured a new assessment of Lorenzo’s credibility and
rewrote the judge’s factual findings. So much for a fair trial.

                    Act Three: This Court

     Fast forward to this Court. To its credit, the majority
opinion rightly concludes that Lorenzo did not “make” the
statements in the emails for purposes of Rule 10b-5(b) liability.
See Janus Capital Group, Inc. v. First Derivative Traders, 564
U.S. 135 (2011). And the majority opinion, also to its credit,
vacates the grossly excessive lifetime suspension of Lorenzo
and sends the case back to the SEC for reconsideration of the
appropriate penalties.
                               6
     So far, so good. But applying what it calls “very
deferential” review, the majority opinion upholds the finding
of liability against Lorenzo under Section 10(b), Rule 10b-5(a)
and (c), and Section 17(a). Maj. Op. 7, 18-25. The majority
opinion does so on the ground that Lorenzo willfully engaged
in a scheme to defraud even though he did not “make” the
statements in the emails.

    I disagree on two alternative and independent grounds
with the majority opinion’s merits analysis.

     First, the majority opinion does not heed the
administrative law judge’s factual conclusions, which were
based on the judge’s in-person assessment of Lorenzo’s
testimony at trial. Those factual conclusions demonstrate that
Lorenzo lacked the necessary mens rea of willfulness.

     To show that Lorenzo willfully engaged in a scheme to
defraud, the SEC had to prove that Lorenzo acted with an intent
to deceive, manipulate, or defraud. But recall that, as findings
of fact, the administrative law judge concluded (after hearing
Lorenzo testify) that Lorenzo did not draft the emails, did not
think about the contents of the emails, and sent the emails only
at the behest of his boss.

     In light of the administrative law judge’s factual findings,
how can Lorenzo be deemed to have willfully engaged in a
scheme to defraud? The majority opinion says that the facts
found by the administrative law judge are not the right facts.
Instead, in reaching its conclusion, the majority opinion relies
on the SEC’s alternative facts, which the SEC devised on its
own without hearing from any witnesses. See Maj. Op. 20-21,
                                   7
26-29 (adopting the SEC’s view of the facts over the
administrative law judge’s view). 1

     It is true that, under certain circumstances, an agency such
as the SEC may re-examine and overturn an administrative law
judge’s factual findings. See Universal Camera Corp. v.
NLRB, 340 U.S. 474, 492 (1951). But an agency does not have
carte blanche to rewrite an administrative law judge’s factual
determinations. Rather, an agency must act reasonably when
it disregards an administrative law judge’s factual findings, a
point the SEC’s attorney expressly acknowledged at oral
argument. See Tr. of Oral Arg. at 28. It is black-letter law,
therefore, that “a contrary initial decision” by an administrative
law judge “may undermine the support for the agency’s
ultimate determination.” Ronald M. Levin & Jeffrey S.
Lubbers, Administrative Law and Process 101 (6th ed. 2017).

     1
        The majority opinion also says that Lorenzo, in his briefing
here, does not describe his own state of mind in the way that the
administrative law judge did. In other words, the majority opinion
says that Lorenzo accepts the SEC’s reconstruction of the facts. I
disagree. To be sure, Lorenzo advances the alternative argument that
he should prevail even if the SEC’s reconstruction of the facts is
correct. But Lorenzo certainly does not agree with or accept the
SEC’s reconstruction.
      Moreover, in making this point, the majority opinion draws a
dichotomy between Lorenzo’s good-faith belief (as noted in his
briefs) in the accuracy of the emails and Lorenzo’s statement that he
did not think about the contents of the email. That is a false
dichotomy. When forwarding an email on behalf of your boss, you
could have a good-faith belief in its accuracy because you trust your
boss, or at least have no reason to delve deeply into the particulars of
the email’s contents, not because you have necessarily read or
independently verified the contents of the email. The majority
opinion notes that Lorenzo, “as of November 2009,” did not trust his
boss. Maj. Op. 27. But that date is of course after the events at issue
in this case.
                                  8
And here is the key principle that speaks directly to this case:
“When the case turns on eyewitness testimony . . . the initial
decision should be given considerable weight: the ALJ was
able to observe the demeanor of the witnesses and assess their
credibility and veracity first hand.” Id.

     In my view, the majority opinion misapplies those black-
letter principles. Contrary to the majority opinion’s acceptance
of the SEC’s reconstruction of the facts in this case, I would
conclude that the SEC’s rewriting of the administrative law
judge’s findings of fact was utterly unreasonable and should
not be sustained or countenanced by this Court. Given that
Lorenzo was the only relevant witness at trial (dwell again on
that point for a few moments) and given that his credibility was
central to the case, the SEC had no reasonable basis to run
roughshod over the administrative law judge’s findings of fact
and credibility assessments. In short, the SEC’s rewriting of
the findings of fact deserves judicial repudiation, not judicial
deference or respect.

     Instead of deferring to the SEC’s creation of an alternative
factual record, as the majority opinion does, we should
examine the administrative law judge’s underlying findings of
fact and ask whether those findings suffice to support the
conclusion that Lorenzo willfully engaged in a scheme to
defraud. The answer to that question, as explained above, is a
clear no. 2

     2
        At oral argument, counsel for the SEC actually stated that it
would have been “more difficult” for the SEC to find Lorenzo liable
if Lorenzo’s email had said that it was being sent “on behalf of” his
boss instead of “at the request of” his boss. Counsel for the SEC
asserted that those two phrases were “meaningfully different.” Tr.
of Oral Arg. at 30. With respect, I find that argument absurd and an
illustration of how the Commission jumped the rails in this case. It
is startling that the SEC thinks such a wafer-thin semantic distinction
                                9
    Second, put that aside. Even if I am wrong about the first
point, the majority opinion still suffers from a separate flaw, in
my view.

     The majority opinion creates a circuit split by holding that
mere misstatements, standing alone, may constitute the basis
for so-called scheme liability under the securities laws – that is,
willful participation in a scheme to defraud – even if the
defendant did not make the misstatements. 3 No other court of
appeals has adopted the approach that the majority opinion
adopts here. Other courts have instead concluded that scheme
liability must be based on conduct that goes beyond a
defendant’s role in preparing mere misstatements or omissions
made by others. See, e.g., Public Pension Fund Group v. KV
Pharmaceutical Co., 679 F.3d 972, 987 (8th Cir. 2012); WPP
Luxembourg Gamma Three Sarl v. Spot Runner, Inc., 655 F.3d
1039, 1057 (9th Cir. 2011); Lentell v. Merrill Lynch & Co., 396
F.3d 161, 177 (2d Cir. 2005); see also SEC v. Kelly, 817 F.
Supp. 2d 340, 343-44 (S.D.N.Y. 2011). Otherwise, the SEC
would be able to evade the important statutory distinction
between primary liability and secondary (aiding and abetting)
liability. After all, if those who aid and abet a misstatement are
themselves primary violators for engaging in a scheme to
defraud, what would be the point of the distinction between
primary and secondary liability?

    The distinction between primary and secondary liability
matters, particularly for private securities lawsuits. For
decades, however, the SEC has tried to erase that distinction so

can make the difference between (i) a lifetime suspension from your
chosen profession and (ii) no penalty at all.
    3
       On page 31, the majority opinion ultimately appears to
acknowledge the circuit split: “Insofar as those courts of appeals
would find Lorenzo’s actions to lie beyond the reach of those
provisions, we read the provisions differently.”
                                 10
as to expand the scope of primary liability under the securities
laws. For decades, the Supreme Court has pushed back hard
against the SEC’s attempts to unilaterally rewrite the law. See
Janus, 564 U.S. 135; Stoneridge Investment Partners, LLC v.
Scientific-Atlanta, Inc. 552 U.S. 148 (2008); Central Bank of
Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S.
164 (1994). Still undeterred in the wake of that body of
Supreme Court precedent, the SEC has continued to push the
envelope and has tried to circumvent those Supreme Court
decisions. See, e.g., In the Matter of John P. Flannery & James
D. Hopkins, Release No. 3981 (Dec. 15, 2014). This case is
merely the latest example. 4

    I agree with the other courts that have rejected the SEC’s
persistent efforts to end-run the Supreme Court. I therefore
respectfully disagree with the majority opinion that Lorenzo’s
role in forwarding the alleged misstatements made by
Lorenzo’s boss can be the basis for scheme liability against
Lorenzo.

     4
       In this case, the SEC relied on its prior decision in Flannery.
But as one respected commentator persuasively explained, the SEC’s
Flannery decision is wrong. “The substantive concern is that the
Commission defined primary liability under portions of the major
anti-fraud provisions in expansive ways that disregarded the
reasoning and rationale of the Supreme Court and some courts of
appeals. The Supreme Court has sought to clarify the distinction
between primary and secondary liability under Rule 10b-5, yet the
Commission’s Flannery decision all but eradicated the distinction
and committed the same error with Section 17(a). It sought to regain
the ground on primary liability that was lost in Stoneridge and Janus
and then went further with novel constructions of primary liability
based on lawful, non-deceptive actions or exorbitant doctrines of but-
for causality.” Andrew N. Vollmer, SEC Revanchism and the
Expansion of Primary Liability Under Section 17(a) and Rule 10b-
5, 10 VA. L. & BUS. REV. 273, 340 (2016).
                              11
     Taking a step back on the scheme liability point, moreover,
think about the oddity of the majority opinion’s combined legal
rulings today. The majority opinion emphatically holds that
Lorenzo did not “make” the statements in the emails. In
reaching that conclusion, the majority opinion accurately says
that “Lorenzo transmitted statements devised by” Lorenzo’s
boss at his boss’s “direction.” Maj. Op. 16. The majority
opinion also correctly notes that Lorenzo’s boss “asked
Lorenzo to send the emails, supplied the central content, and
approved the messages for distribution.” Maj. Op. 17. At the
same time, however, the majority opinion emphatically holds
that Lorenzo nonetheless willfully engaged in a scheme to
defraud solely because of the statements made by his boss.
That combined holding makes little sense (at least to me) under
the facts of this particular case. Nor does it make much sense
under the law, which is presumably why the other courts of
appeals have rejected that kind of legal jujitsu. In these
circumstances, perhaps the alleged offender (here, Lorenzo)
could have been charged with aiding and abetting, if the
relevant mens rea requirements for aiding and abetting liability
were met. But Lorenzo may not be held liable as a primary
violator, in my view.

                          *    *   *

     Administrative adjudication of individual disputes is
usually accompanied by deferential review from the Article III
Judiciary. That agency-centric process is in some tension with
Article III of the Constitution, the Due Process Clause of the
Fifth Amendment, and the Seventh Amendment right to a jury
trial in civil cases. See generally PHILIP HAMBURGER, IS
ADMINISTRATIVE LAW UNLAWFUL? 227-57 (2014). That
tension is exacerbated when, as here, the agency’s political
appointees – without hearing from any witnesses – disregard
an administrative law judge’s factual findings. That said, the
                                12
Supreme Court has allowed administrative adjudication ever
since Crowell v. Benson, 285 U.S. 22 (1932). But the premise
of Crowell v. Benson is that, putting aside any formal
constitutional problems with the notion of administrative
adjudication, the administrative adjudication process will at
least operate with efficiency and with fairness to the parties
involved. This case, among others, casts substantial doubt on
that premise.

     Securities brokers such as Frank Lorenzo obviously do not
tug at the judicial heartstrings. And maybe Lorenzo really is
guilty of negligence (or worse). But before the SEC reaches
such a conclusion, Lorenzo is entitled to a fair process just like
everyone else. Cf. United States v. Burwell, 690 F.3d 500, 527
(D.C. Cir. 2012) (en banc) (Kavanaugh, J., dissenting). He has
not received a fair process in this case.

     I hope that the SEC on remand pays attention, comes to its
senses, and (at a minimum) dramatically scales back the
sanctions in this case. Indeed, notwithstanding the majority
opinion, I hope that the SEC, on its own motion, goes further
than that: The SEC should vacate the order against Lorenzo in
its entirety and either end this case altogether or (if appropriate
and permissible) fairly start the process anew before the
administrative law judge.

     I firmly disagree with the majority opinion’s decision to
sustain the SEC’s findings of liability under Section 10(b),
Rule 10b-5(a) and (c), and Section 17(a). I respectfully dissent.
