Securities and Exchange Commission v. Charles Zandford (535 U.S. 813)
U.S. Supreme Court · decided June 3, 2002 · Supreme Court Database (Spaeth)
- Citation
- 535 U.S. 813 · 122 S. Ct. 1899
- Decided
- June 3, 2002
- Term
- October Term 2001
- Vote
- 9–0
- Majority author
- Justice Stevens
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Stevens delivered the opinion of the Court. The Securities and Exchange Commission (SEC) filed a civil complaint alleging that a stockbroker violated both § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U. S. C. § 78j(b), and the SEC’s Rule 10b-5, by selling his customer’s securities and using the proceeds for his own benefit without the customer’s knowledge or consent. The question presented is whether the alleged fraudulent conduct was "in connection with the purchase or sale of any security” within the meaning of the statute and the Rule. I Between 1987 and 1991, respondent was employed as a securities broker in the Maryland branch of a New York brokerage firm. In 1987, he persuaded William Wood, an elderly man in poor health, to open a joint investment account for himself and his mentally retarded daughter. According to . the SEC’s complaint, the "stated investment objectives for the account were ‘safety of principal and income.’” App. to Pet. for Cert. 27a. The Woods granted respondent discretion to manage their account and a general power of attorney to engage in securities transactions for their benefit without prior approval. Relying on respondent’s promise to “conservatively invest” their money, the Woods entrusted him with $419,255. Before Mr. Wood’s death in 1991, all of that money was gone. In 1991, the National Association of…
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