Fed. Sec. L. Rep. P 95,723 Jerry D. Fridrich v. J. C. Bradford’s Empirical Analysis

Citation profile

24 federal appellate · 4 district ·

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 47 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “(b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.”

   2 later decisions quote this exact passage · from the majority
   e.g. Bradford v. Commissioner · Braun v. Northern Ohio Bank

2. “As applied to the instant case, this holding in Affiliated Ute surely warrants our conclusion that the requisite element of causation in fact has been established by the admitted withholding by defendants of material inside information which they were under an obligation to disclose, such information being clearly material in the sense that plaintiffs as reasonable investors might have considered it important in making their decision to purchase Douglas stock. Defendants argue that the Affiliated Ute rule of causation in fact should be confined to the facts of that case which involved face-to-face transactions. We disagree. That rule is dependent not upon the character of the transaction— face-to-face versus national securities exchange — but rather upon whether the defendant is obligated to disclose the inside information. Here, as we have held above, defendants were under a duty to the investing public, including plaintiffs, not to trade in or to recommend trading in Douglas stock without publicly disclosing the revised earnings information which was in their possession. They breached that duty. Causation in fact therefore has been established. Our holding that causation in fact has been established despite the fact that all transactions took place on a national securities exchange is consistent with the underlying purpose of Section 10(b) and Rule 10b-5 “to prevent inequitable and unfair practices and to insure fairness in securities transactions generally, whether conduct”

   1 later decision quote this exact passage · from the majority
   e.g. 540 F. Supp. 667 - Backman v. Polaroid Corp.

3. “Non-contemporaneous traders do not require the special protection of the “disclose or abstain” rule because they do not suffer the disadvantage of trading with someone who has superior access to information. Parties on both sides of the transaction have equal access to information... Neither an insider’s trading when he is not in possession of material inside information, nor the decision to abstain from trading when he does possess such information, gives rise to a duty of disclosure. That duty arises only when necessary to equalize the information available to outside investors who are actively trading with an insider who is privy to undisclosed material facts. When the insider ceases trading, the informational imbalance ends and the market returns to its normal state.”

   1 later decision quote this exact passage · from the majority
   e.g. 540 F. Supp. 667 - Backman v. Polaroid Corp.