Securities and Exchange Commission v. Zandford

Summary

Justice Stevens delivered the Court’s opinion holding that the SEC sufficiently alleged fraud in connection with securities sales under § 10(b) and Rule 10b-5 where a broker sold customers’ securities as part of a scheme to appropriate the proceeds. The securities transactions and deceptive breaches of fiduciary duty coincided; neither a misrepresentation about a security’s value nor an affirmative misrepresentation was necessary. The Court reversed the Fourth Circuit’s judgment directing dismissal and remanded. It did not decide whether the record supported summary judgment for the SEC or whether the District Court properly denied discovery. There were no separate opinions.