Source: https://www.lexisnexis.com/community/case-opinion/b/case/posts/holmes-v-sec-investor-prot-corp
Timestamp: 2020-07-14 13:22:43
Document Index: 727962110

Matched Legal Cases: ['§ 1961', '§ 78', '§ 78', '§ 15', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78', '§ 78']

Holmes v. Sec. Investor Prot. Corp. | LexisNexis Case Opinion
Holmes v. Sec. Investor Prot. Corp.
November 13, 1991, Argued ; March 24, 1992, Decided
[*261] [***539] [**1314] JUSTICE SOUTER delivered the opinion of the [****8] Court.
Respondent Securities Investor Protection Corporation (SIPC) alleges that petitioner Robert G. Holmes, Jr., conspired in a stock-manipulation scheme that disabled two broker-dealers from meeting obligations [***540] to customers, thus triggering SIPC's statutory duty to advance funds to reimburse the customers. The issue is whether SIPC can recover from Holmes under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§ 1961-1968 (1988 ed. and Supp. II). We hold that it cannot.
The Securities Investor Protection Act of 1970 (SIPA), 84 Stat. 1636, as amended, 15 U. S. C. §§ 78aaa-78lll, authorized the formation of SIPC, a private nonprofit corporation, § 78ccc(a)(1), of which most broker-dealers registered under § 15(b) of the Securities Exchange Act of 1934, § 78o(b), are required to be "members," § 78ccc(a)(2)(A). Whenever SIPC determines that a member "has failed or is in danger of failing to meet its obligations to customers, [****9] " and finds certain other statutory conditions satisfied, it may ask for a "protective decree" in federal district court. § 78eee(a)(3). Once a court finds grounds for granting such a petition, § 78eee(b)(1), it must appoint a trustee charged with liquidating the member's business, § 78eee(b)(3).
After returning all securities registered in specific customers' names, §§ 78fff-2(c)(2); 78fff(a)(1)(A); 78lll(3), the trustee must pool securities not so registered together with cash found in customers' accounts and divide this pool ratably to satisfy customers' claims, §§ 78fff-2(b); 78fff(a)(1)(B). 2 [****10] To [*262] the extent the pool of customer property is inadequate, SIPC must advance up to $ 500,000 per customer 3 to the trustee for use in satisfying those claims. § 78fff-3(a). 4
503 U.S. 258 *; 112 S. Ct. 1311 **; 117 L. Ed. 2d 532 ***; 1992 U.S. LEXIS 1947 ****; 60 U.S.L.W. 4225; Fed. Sec. L. Rep. (CCH) P96,555; 92 Cal. Daily Op. Service 2460; 92 Daily Journal DAR 4030; 6 Fla. L. Weekly Fed. S 89
ROBERT G. HOLMES, JR., PETITIONER v. SECURITIES INVESTOR PROTECTION CORPORATION, ET AL.
Disposition: 908 F.2d 1461, reversed and remanded.
customers, sale of securities, purchaser, seller, broker-dealers, manipulated, proximate, predicate act, courts, district court, violations, damages, subrogation, cause of action, proximate-cause, conspirators, predicate offense, liquidation, predicated, proximate cause, provisions, causation, stock, court of appeals, antitrust, Investor, rights, racketeering activity, standing requirement, Clayton Act
Securities Law, RICO Actions, General Overview, Antitrust & Trade Law, Private Actions, Costs & Attorney Fees, Clayton Act, Remedies, Standing, Torts, Causation, Proximate Cause, Elements, Civil Procedure, Justiciability