The Wharf (Holdings) Limited, et al. v. United International Holdings, Inc. et al. (532 U.S. 588)
U.S. Supreme Court · decided May 21, 2001 · Supreme Court Database (Spaeth)
- Citation
- 532 U.S. 588 · 121 S. Ct. 1776
- Decided
- May 21, 2001
- Term
- October Term 2000
- Vote
- 9–0
- Majority author
- Justice Breyer
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Breyer delivered the opinion of the Court. This securities fraud action focuses upon a company that sold an option to buy stock while secretly intending never to honor the option. The question before us is whether this conduct violates § 10(b) of the Securities Exchange Act of 1934, which prohibits using “any manipulative or deceptive device or contrivance” “in connection with the purchase or sale of any security.” 48 Stat. 891, 15 U. S. C. § 78j(b); see also 17 CFR §240.10b-5 (2000). We conclude that it does. I Respondent United International Holdings, Inc., a Colorado-based company, sued petitioner The Wharf (Holdings) Limited, a Hong Kong firm, in Colorado's Federal District Court. United said that in October 1992 Wharf had sold it an option to buy 10% of the stock of a new Hong Kong cable television system. But, United alleged, at the time of the sale Wharf secretly intended not to permit United to exercise the option. United claimed that Wharf’s conduct amounted to a fraud “in connection with the .. . sale of [a] security,” prohibited by § 10(b), and violated numerous state laws as well. A jury found in United’s favor. The Court of Appeals for the Tenth Circuit upheld that verdict. 210 F. 3d 1207 (2000). And we granted certiorari to consider whether the dispute fell within the scope of § 10(b). The relevant facts, viewed in the light most favorable to the verdict…
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