October Term 2001 · Docket 01-147
Does a broker's churning violate federal securities law?
The SEC seeks to hold a broker liable for excessive trading. The broker argues other laws cover this conduct.
Verified source milestones
- — An official oral-argument transcript was verified.
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
The SEC argues brokers are the critical link between markets and investors.
The broker argues other laws cover this conduct.
Courts of appeal unanimously concluded churning is a violation.
The broker claims state and federal laws address this behavior.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 3, lines 4-10 — Transcript, file page 3, lines 4-10
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
- Official Supreme Court Transcript — file page 52, lines 20-22 — Transcript, file page 52, lines 20-22
A citizen's guide to the whole case
What this case is about
The SEC argues brokers are the critical link between markets and investors. It claims churning violates federal law. The broker argues other laws cover this conduct. Courts of appeal unanimously view churning as a violation. The dispute centers on federal liability for excessive trading.
Official sources for this section
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
How the case got here
The Supreme Court heard oral argument in this case on March 18, 2002.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 4-10 — Transcript, file page 3, lines 4-10
- Official Supreme Court Transcript — file page 52, lines 20-22 — Transcript, file page 52, lines 20-22
What each side wants
The SEC wants a federal law violation finding.
The broker wants dismissal of the federal claim.
Official sources for this section
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
What each side says
The SEC argues brokers must protect investors from churning.
The broker argues state and self-regulatory laws suffice.
Official sources for this section
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
What the justices asked
Does federal law prohibit churning by stockbrokers?
Do other laws adequately cover this conduct?
Official sources for this section
- Official Supreme Court Transcript — file page 52, lines 20-22 — Transcript, file page 52, lines 20-22
Why it matters
Investors rely on brokers to act in their best interest. Excessive trading harms individual investors. Clear federal rules protect market integrity. Broker accountability ensures fair market participation. This case defines broker duties to investors.
Official sources for this section
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 4-10 — Transcript, file page 3, lines 4-10
- Official Supreme Court Transcript — file page 52, lines 20-22 — Transcript, file page 52, lines 20-22
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
- Official Supreme Court Transcript — file page 17, lines 28-26 — Transcript, file page 17, lines 28-26
- Official Supreme Court Transcript — file page 3, lines 11-4 — Transcript, file page 3, lines 11-4
- Official Supreme Court Transcript — file page 50, lines 35-14 — Transcript, file page 50, lines 35-14
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.