Supreme Court of the United States
The Wharf (holdings) Ltd. v. United International Holdings, Inc.
May 29, 2001532 U.S. 588
Summary
In The Wharf (Holdings) Ltd. v. United International Holdings, Inc., the Supreme Court held that selling an option to buy stock while secretly intending not to honor it violates § 10(b) of the Securities Exchange Act. The Court reasoned that oral contracts satisfy the statute's 'purchase or sale' requirement because they involve actual sales rather than potential buyers, and that a promise implies an intent to perform, making secret reservation fraud.