Wilko v. Swan et al., Doing Business As Hayden, Stone & Co., et al. (346 U.S. 427)
U.S. Supreme Court · decided December 7, 1953 · Supreme Court Database (Spaeth)
- Citation
- 346 U.S. 427 · 74 S. Ct. 182
- Docket
- No. 39
- Argued
- October 21, 1953
- Decided
- December 7, 1953
- Term
- October Term 1953
- Vote
- 7–2
- Majority author
- Justice Reed
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
How the Justices voted
- Majority
- Chief Justice Warren, Justice Black, Justice Douglas, Justice Clark, Justice Burton, Justice Reed (wrote), Justice R. H. Jackson (wrote a concurrence)
- Dissenting
- Justice Frankfurter (wrote), Justice Minton
Opinion excerpt
Mr. Justice Reed delivered the opinion of the Court. This action by petitioner, a customer, against respondents, partners in a securities brokerage firm, was brought in the United States District Court for the Southern District of New York, to recover damages under § 12 (2) of the Securities Act of 1933. The complaint alleged that on or about January 17, 1951, through the instrumentalities of interstate commerce, petitioner was induced by Hayden, Stone and Company to purchase 1,600 shares of the common stock of Air Associates, Incorporated, by false representations that pursuant to a merger contract with the Borg Warner Corporation, Air Associates’ stock would be valued at $6.00 per share over the then current market price, and that financial interests were buying up the stock for the speculative profit. It was alleged that he was not told that Haven B. Page (also named as a defendant but not involved in this review), a director of, and counsel for, Air Associates was then selling his own Air Associates’ stock, including some or all that petitioner purchased. Two weeks after the purchase, petitioner disposed of the stock at a loss. Claiming that the loss was due to the firm’s misrepresentations and omission of information concerning Mr. Page, he sought damages. Without answering the complaint, the respondent moved to stay the trial of the action pursuant to § 3 of the United…
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