United States v. O'Hagan, 521 U.S. 642, 16 (1997)

Page:   Index   Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Cite as: 521 U. S. 642 (1997)

Opinion of the Court

may thus be viewed as sufficiently detached from a subsequent securities transaction that § 10(b)'s "in connection with" requirement would not be met. Ibid.

Justice Thomas' charge that the misappropriation theory is incoherent because information, like funds, can be put to multiple uses, see post, at 681-686 (opinion concurring in judgment in part and dissenting in part), misses the point. The Exchange Act was enacted in part "to insure the maintenance of fair and honest markets," 15 U. S. C. § 78b, and there is no question that fraudulent uses of confidential information fall within § 10(b)'s prohibition if the fraud is "in connection with" a securities transaction. It is hardly remarkable that a rule suitably applied to the fraudulent uses of certain kinds of information would be stretched beyond reason were it applied to the fraudulent use of money.

Justice Thomas does catch the Government in overstatement. Observing that money can be used for all manner of purposes and purchases, the Government urges that confidential information of the kind at issue derives its value only from its utility in securities trading. See Brief for United States 10, 21; post, at 683-684 (several times emphasizing the word "only"). Substitute "ordinarily" for "only," and the Government is on the mark.8

8 Justice Thomas' evident struggle to invent other uses to which O'Hagan plausibly might have put the nonpublic information, see post, at 685, is telling. It is imaginative to suggest that a trade journal would have paid O'Hagan dollars in the millions to publish his information. See Tr. of Oral Arg. 36-37. Counsel for O'Hagan hypothesized, as a nontrading use, that O'Hagan could have "misappropriat[ed] this information of [his] law firm and its client, deliver[ed] it to [Pillsbury], and suggest[ed] that [Pillsbury] in the future . . . might find it very desirable to use [O'Hagan] for legal work." Id., at 37. But Pillsbury might well have had large doubts about engaging for its legal work a lawyer who so stunningly displayed his readiness to betray a client's confidence. Nor is the Commission's theory "incoherent" or "inconsistent," post, at 680, 692, for failing to inhibit use of confidential information for "personal amusement . . . in a fantasy stock trading game," post, at 685.


Page:   Index   Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: October 4, 2007