October Term 2013 · Docket 12-79
Does a private fraud suit require a direct link to a covered securities transaction?
Investors sue lawyers for aiding a Ponzi scheme. The lawyers argue the fraud did not directly involve buying or selling securities.
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
Paul Clement argues the fraud included material misrepresentations about covered securities transactions.
Clement warns against letting materiality or causation slip into the connection requirement.
Ms. Goldenberg agrees with a narrow formulation of the legal standard.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 10, lines 37-45 — Transcript, file page 10, lines 37-45
- Official Supreme Court Transcript — file page 10, lines 5-17 — Transcript, file page 10, lines 5-17
- Official Supreme Court Transcript — file page 10, lines 51-11 — Transcript, file page 10, lines 51-11
- Official Supreme Court Transcript — file page 11, lines 43-1 — Transcript, file page 11, lines 43-1
- Official Supreme Court Transcript — file page 12, lines 13-19 — Transcript, file page 12, lines 13-19
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 4, lines 45-1 — Transcript, file page 4, lines 45-1
- Official Supreme Court Transcript — file page 4, lines 7-17 — Transcript, file page 4, lines 7-17
- Official Supreme Court Transcript — file page 5, lines 51-9 — Transcript, file page 5, lines 51-9
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
- Official Supreme Court Transcript — file page 56, lines 39-15 — Transcript, file page 56, lines 39-15
- Official Supreme Court Transcript — file page 57, lines 49-1 — Transcript, file page 57, lines 49-1
- Official Supreme Court Transcript — file page 6, lines 47-3 — Transcript, file page 6, lines 47-3
- Official Supreme Court Transcript — file page 7, lines 27-5 — Transcript, file page 7, lines 27-5
- Official Supreme Court Transcript — file page 8, lines 15-19 — Transcript, file page 8, lines 15-19
- Official Supreme Court Transcript — file page 8, lines 33-5 — Transcript, file page 8, lines 33-5
- Official Supreme Court Transcript — file page 9, lines 37-47 — Transcript, file page 9, lines 37-47
A citizen's guide to the whole case
What this case is about
This case tests the scope of federal securities fraud laws. It asks whether a private plaintiff must prove a direct link between the fraud and a specific securities transaction.
Official sources for this section
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
How the case got here
The Supreme Court heard oral argument in this case on October 7, 2013.
Official sources for this section
- Official Supreme Court Transcript — file page 4, lines 7-17 — Transcript, file page 4, lines 7-17
- Official Supreme Court Transcript — file page 57, lines 49-1 — Transcript, file page 57, lines 49-1
What each side wants
The investors want the court to allow their fraud claims to proceed.
The lawyers want the court to dismiss the investors' fraud claims.
Official sources for this section
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
What each side says
The investors argue the lawyers' fraud directly affected the market for covered securities.
The lawyers argue the fraud did not involve a direct transaction in covered securities.
Official sources for this section
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
What the justices asked
Chief Justice Roberts asks if listing fake stocks on a loan application violates securities law.
Justice Kagan asks how a misrepresentation affects a potential purchaser or seller in the market.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 37-45 — Transcript, file page 10, lines 37-45
- Official Supreme Court Transcript — file page 10, lines 5-17 — Transcript, file page 10, lines 5-17
- Official Supreme Court Transcript — file page 10, lines 51-11 — Transcript, file page 10, lines 51-11
- Official Supreme Court Transcript — file page 11, lines 43-1 — Transcript, file page 11, lines 43-1
- Official Supreme Court Transcript — file page 12, lines 13-19 — Transcript, file page 12, lines 13-19
- Official Supreme Court Transcript — file page 4, lines 45-1 — Transcript, file page 4, lines 45-1
- Official Supreme Court Transcript — file page 5, lines 51-9 — Transcript, file page 5, lines 51-9
- Official Supreme Court Transcript — file page 56, lines 39-15 — Transcript, file page 56, lines 39-15
- Official Supreme Court Transcript — file page 57, lines 49-1 — Transcript, file page 57, lines 49-1
- Official Supreme Court Transcript — file page 6, lines 47-3 — Transcript, file page 6, lines 47-3
- Official Supreme Court Transcript — file page 7, lines 27-5 — Transcript, file page 7, lines 27-5
- Official Supreme Court Transcript — file page 8, lines 15-19 — Transcript, file page 8, lines 15-19
- Official Supreme Court Transcript — file page 8, lines 33-5 — Transcript, file page 8, lines 33-5
- Official Supreme Court Transcript — file page 9, lines 37-47 — Transcript, file page 9, lines 37-47
Why it matters
This case defines the boundary of federal securities fraud liability. It determines whether private plaintiffs can sue for fraud without proving a direct securities transaction. The outcome shapes the scope of investor protections in financial markets.
Official sources for this section
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
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 10, lines 37-45 — Transcript, file page 10, lines 37-45
- Official Supreme Court Transcript — file page 10, lines 5-17 — Transcript, file page 10, lines 5-17
- Official Supreme Court Transcript — file page 10, lines 51-11 — Transcript, file page 10, lines 51-11
- Official Supreme Court Transcript — file page 11, lines 43-1 — Transcript, file page 11, lines 43-1
- Official Supreme Court Transcript — file page 12, lines 13-19 — Transcript, file page 12, lines 13-19
- Official Supreme Court Transcript — file page 4, lines 45-1 — Transcript, file page 4, lines 45-1
- Official Supreme Court Transcript — file page 4, lines 7-17 — Transcript, file page 4, lines 7-17
- Official Supreme Court Transcript — file page 5, lines 51-9 — Transcript, file page 5, lines 51-9
- Official Supreme Court Transcript — file page 56, lines 39-15 — Transcript, file page 56, lines 39-15
- Official Supreme Court Transcript — file page 57, lines 49-1 — Transcript, file page 57, lines 49-1
- Official Supreme Court Transcript — file page 6, lines 47-3 — Transcript, file page 6, lines 47-3
- Official Supreme Court Transcript — file page 7, lines 27-5 — Transcript, file page 7, lines 27-5
- Official Supreme Court Transcript — file page 8, lines 15-19 — Transcript, file page 8, lines 15-19
- Official Supreme Court Transcript — file page 8, lines 33-5 — Transcript, file page 8, lines 33-5
- Official Supreme Court Transcript — file page 9, lines 37-47 — Transcript, file page 9, lines 37-47
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 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
- Official Supreme Court Transcript — file page 20, lines 27-41 — Transcript, file page 20, lines 27-41
- Official Supreme Court Transcript — file page 30, lines 35-15 — Transcript, file page 30, lines 35-15
- Official Supreme Court Transcript — file page 4, lines 19-43 — Transcript, file page 4, lines 19-43
- Official Supreme Court Transcript — file page 54, lines 35-37 — Transcript, file page 54, lines 35-37
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.