Financial services company Refco Inc. (Refco) loaned money to its clients to purchase securities. Due to market losses, many of Refco’s clients were unable to repay their loans. Refco allegedly transferred this uncollectible debt to a holding company and then created sham loan transactions with third parties in an attempt to hide the losses. Refco also issued bond offerings and an IPO. Law firm Mayer Brown LLP (Mayer Brown) (defendant) assisted Refco in its creation of an offering memorandum, the IPO, and the registration statement filed in connection with the securities offering. These documents relied on the sham transactions to hide the aforementioned losses. Mayer Brown drafted portions of these documents before their issuance, but none of the statements in the documents were attributed to Mayer Brown. Pacific Investment Management Company LLC (Pacific) brought a Rule 10b-5 suit against Mayer Brown, seeking to hold the firm liable for its role in the creation of false statements within the offering documents. The district court granted Mayer Brown’s motion to dismiss. Pacific appealed.