Supreme Court of the United States

Chiarella v. United States

March 18, 1980445 U.S. 222

Summary

The Supreme Court reversed Vincent Chiarella’s criminal conviction under §10(b) of the Securities Exchange Act, holding that mere possession of material nonpublic market information does not create a duty to disclose absent a fiduciary or trust relationship. The Court also found the jury instructions deficient because they did not require proof of such a duty.

Holding

  • Whether §10(b) imposes a duty to disclose material nonpublic information to sellers absent a fiduciary relationship.. No, a duty to disclose under §10(b) does not arise from the mere possession of nonpublic market information.
  • Whether the conviction is valid given the jury instructions lacking a duty element.. The conviction must be reversed because the jury was not instructed to find a duty to disclose, an essential element of a §10(b) violation.

Docket 78-1202

Cited authorities

  • 37 Md. L. Rev. 488
  • 43 N.Y.U. L. Rev. 541
  • 75 Harv. L. Rev. 1449
  • 33 U. Chi. L. Rev. 359
  • 42 Va. L. Rev. 537
  • 121 U. Pa. L. Rev. 798
  • Securities Exchange Act Release No. 34-9950
  • 38 FR 3902

Cited by

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