Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U.S. 164, 13 (1994)

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176

CENTRAL BANK OF DENVER, N. A. v. FIRST INTERSTATE BANK OF DENVER, N. A.

Opinion of the Court

consistent with the prohibition of aiding and abetting"); Brief for SEC 8 ("[W]e think that when read in context [§ 10(b)] is broad enough to encompass liability for such 'indirect' violations").

The federal courts have not relied on the "directly or indirectly" language when imposing aiding and abetting liability under § 10(b), and with good reason. There is a basic flaw with this interpretation. According to respondents and the SEC, the "directly or indirectly" language shows that "Congress . . . intended to reach all persons who engage, even if only indirectly, in proscribed activities connected with securities transactions." Ibid. The problem, of course, is that aiding and abetting liability extends beyond persons who engage, even indirectly, in a proscribed activity; aiding and abetting liability reaches persons who do not engage in the proscribed activities at all, but who give a degree of aid to those who do. A further problem with respondents' interpretation of the "directly or indirectly" language is posed by the numerous provisions of the 1934 Act that use the term in a way that does not impose aiding and abetting liability. See § 7(f)(2)(C), 15 U. S. C. § 78g(f)(2)(C) (direct or indirect ownership of stock); § 9(b)(2)-(3), 15 U. S. C. § 78i(b)(2)-(3) (direct or indirect interest in put, call, straddle, option, or privilege); § 13(d)(1), 15 U. S. C. § 78m(d)(1) (direct or indirect ownership); § 16(a), 15 U. S. C. § 78p(a) (direct or indirect ownership); § 20, 15 U. S. C. § 78t (direct or indirect control of person violating Act). In short, respondents' interpretation of the "directly or indirectly" language fails to support their suggestion that the text of § 10(b) itself prohibits aiding and abetting. See 5B A. Jacobs, Litigation and Practice Under Rule 10b-5 § 40.07, p. 2-465 (rev. 1993).

Congress knew how to impose aiding and abetting liability when it chose to do so. See, e. g., Act of Mar. 4, 1909, § 332, 35 Stat. 1152, as amended, 18 U. S. C. § 2 (general criminal aiding and abetting statute); Packers and Stockyards Act, 1921, ch. 64, § 202, 42 Stat. 161, as amended, 7 U. S. C. § 192(g)

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