Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A. and Jack K. Naber (511 U.S. 164)
U.S. Supreme Court · decided April 19, 1994 · Supreme Court Database (Spaeth)
- Citation
- 511 U.S. 164 · 114 S. Ct. 1439
- Decided
- April 19, 1994
- Term
- October Term 1993
- Vote
- 5–4
- Majority author
- Justice Kennedy
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice Kennedy delivered the opinion of the Court. As we have interpreted it, § 10(b) of the Securities Exchange Act of 1934 imposes private civil liability on those who commit a manipulative or deceptive act in connection with the purchase or sale of securities. In this case, we must answer a question reserved in two earlier decisions: whether private civil liability under § 10(b) extends as well to those who do not engage in the manipulative or deceptive practice, but who aid and abet the violation. See Herman & MacLean v. Huddleston, 459 U. S. 375, 379, n. 5 (1983); Ernst & Ernst v. Hochfelder, 425 U. S. 185, 191-192, n. 7 (1976). I In 1986 and 1988, the Colorado Springs-Stetson Hills Public Building Authority (Authority) issued a total of $26 million in bonds to finance public improvements at Stetson Hills, a planned residential and commercial development in Colorado Springs. Petitioner Central Bank of Denver served as indenture trustee for the bond issues. The bonds were secured by landowner assessment liens, which covered about 250 acres for the 1986 bond issue and about 272 acres for the 1988 bond issue. The bond covenants required that the land subject to the liens be worth at least 160% of the bonds’ outstanding principal and interest. The covenants required Am West Development, the developer of Stetson Hills, to give Central Bank an annual report containing…
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