Holmes v. Securities Investor Protection Corporation, 503 U.S. 258, 20 (1992)

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Cite as: 503 U. S. 258 (1992)

Opinion of O'Connor, J.

that a plaintiff need not be a purchaser or a seller to assert RICO claims predicated on violations of fraud in the sale of securities.

Section 10(b) of the Securities Exchange Act of 1934 (1934 Act) makes it unlawful for any person to use, "in connection with the purchase or sale of any security," any "manipulative or deceptive device or contrivance" in contravention of rules or regulations that the Securities and Exchange Commission (SEC) may prescribe. 15 U. S. C. § 78j(b). Pursuant to its authority under § 10(b), the SEC has adopted Rule 10b-5, which prohibits manipulative or deceptive acts "in connection with the purchase or sale of any security." 17 CFR § 240.10b-5 (1991). In 1971, we ratified without discussion the "established" view that § 10(b) and Rule 10b-5 created an implied right of action. Superintendent of Ins. of N. Y. v. Bankers Life & Casualty Co., 404 U. S. 6, 13, n. 9. Four years later, in Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723 (1975), we confirmed the federal courts' "longstanding acceptance" 1 of the rule that a plaintiff must have actually purchased or sold the securities at issue in order to bring a Rule 10b-5 private damages action. Id., at 733.

In this case, the District Court held that SIPC, which was neither a purchaser nor a seller of the allegedly manipulated securities, lacked standing to assert RICO claims predicated on alleged violations of § 10(b) and Rule 10b-5. App. to Pet. for Cert. 45a. The Court of Appeals reversed and held that Blue Chip Stamps' purchaser/seller limitation does not apply to suits brought under RICO. Securities Investment Protection Corp. v. Vigman, 908 F. 2d 1461 (CA9 1990). An ex-1 That acceptance was not universal. E. g., Eason v. General Motors Acceptance Corp., 490 F. 2d 654, 659 (CA7 1973) (holding that "the protection of [Rule 10b-5] extends to persons who, in their capacity as investors, suffer significant injury as a direct consequence of fraud in connection with a securities transaction, even though their participation in the transaction did not involve either the purchase or the sale of a security") (Stevens, J.).

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