Cite as: 532 U. S. 588 (2001)
Opinion of the Court
not relate to the value of a security purchase or the consideration paid, and hence does not implicate § 10(b)'s full disclosure policy. Even were it the case that the Act covers only misrepresentations likely to affect the value of securities, Wharf's secret reservation was such a misrepresentation. To sell an option while secretly intending not to permit the option's exercise is misleading, because a buyer normally presumes good faith. Similarly, the secret reservation misled United about the option's value, which was, unbeknownst to United, valueless. P. 596.
(d) Finally, the Court rejects Wharf's claim that interpreting the Act to allow recovery in a case like this one will permit numerous plaintiffs to bring federal securities claims that are in reality no more than ordinary state breach-of-contract claims lying outside the Act's basic objectives. United's claim is not simply that Wharf failed to carry out a promise to sell it securities, but that Wharf sold it a security (the option) while secretly intending from the very beginning not to honor the option. Moreover, Wharf has not shown that its concern has proved serious as a practical matter in the past or that it is likely to prove serious in the future. Pp. 596-597.
210 F. 3d 1207, affirmed.
Breyer, J., delivered the opinion for a unanimous Court.
Paul M. Dodyk argued the cause for petitioners. With him on the briefs was William R. Jentes.
Louis R. Cohen argued the cause for respondents. With him on the brief were Jonathan J. Frankel, David B. Wilson, and Jeffrey A. Chase.
Matthew D. Roberts argued the cause for the Securities and Exchange Commission as amicus curiae urging affirmance. With him on the brief were Acting Solicitor General Underwood, Deputy Solicitor General Kneedler, David M. Becker, Meyer Eisenberg, Jacob H. Stillman, Katharine B. Gresham, and Susan S. McDonald.
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
589
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