284
Opinion of O'Connor, J.
in tension with our reasoning in Blue Chip Stamps. In that case, the Court admitted that it was not "able to divine from the language of § 10(b) the express 'intent of Congress' as to the contours of a private cause of action under Rule 10b-5." 421 U. S., at 737. The purchaser/seller standing limitation in Rule 10b-5 damages actions thus does not stem from a construction of the phrase "in connection with the purchase or sale of any security." Rather, it rests on the relationship between § 10(b) and other provisions of the securities laws, id., at 733-736, and the practical difficulties in granting standing in the absence of an executed transaction, id., at 737-749, neither of which are relevant in the RICO context.
Arguably, even if § 10(b)'s reference to fraud "in connection with" the sale of a security is insufficient to limit the plaintiff class to purchasers and sellers, § 1961(1)'s reference to fraud "in" the sale of a security performs just such a narrowing function. But we have previously had occasion to express reservations on the validity of that distinction. In United States v. Naftalin, 441 U. S. 768 (1979), we reinstated the conviction of a professional investor who engaged in fraudulent "short selling" by placing orders with brokers to sell shares of stock which he falsely represented that he owned. This Court agreed with the District Court that Naftalin was guilty of fraud "in" the "offer" or "sale" of securities in violation of § 17(a)(1) of the Securities Act of 1933, 15 U. S. C. § 77q(a)(1), even though the fraud was perpetrated on the brokers, not their purchasing clients. The Court noted:
"[Naftalin] contends that the requirement that the fraud be 'in' the offer or sale connotes a narrower range of activities than does the phrase 'in connection with,' which is found in § 10(b) . . . . First, we are not necessarily persuaded that 'in' is narrower than 'in connection with.' Both Congress, see H. R. Rep. No. 85, 73d Cong., 1st Sess., 6 (1933), and this Court, see Superintendent of Insurance v. Bankers Life & Cas. Co., 404 U. S. 6, 10
Page: Index Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: October 4, 2007