Court Opinion

ID: 9427821
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:22:01.807792+00
Date Added: 2024-06-11T17:23:09.985863
License: Public Domain

Mr. Justice Brennan,
concurring in the judgment.
The Court holds, correctly in my view, that “a duty to disclose under § 10 (b) does not arise from the mere posses*239sion of nonpublic market information.” Ante, at 235. Prior to so holding, however, it suggests that no violation of § 10 (b) could be made out absent a breach of some duty-arising out of a fiduciary relationship between buyer and seller. I cannot subscribe to that suggestion. On the contrary, it seems to me that Part I of The Chief Justice's dissent, post, at 239-243, correctly states the applicable substantive law — a person violates § 10 (b) whenever he improperly obtains or converts to his own benefit nonpublic information which he then uses in connection with the purchase or sale of securities.
While I agree with Part I of The Chief Justice’s dissent, I am unable to agree with Part II. Rather, I concur in the judgment of the majority because I think it clear that the legal theory sketched by The Chief Justice is not the one presented to the jury. As I read them, the instructions in effect permitted the jurors to return a verdict of guilty merely upon a finding of failure to disclose material, nonpublic information in connection with the purchase of stock. I can find no instruction suggesting that one element of the offense was the improper conversion or misappropriation of that nonpublic information. Ambiguous suggestions in the indictment and'the prosecutor’s opening and closing remarks are no substitute for the proper instructions. And neither reference to the harmless-error doctrine nor some post hoc theory of constructive stipulation can cure the defect. The simple fact is that to affirm the conviction without an adequate instruction would be tantamount to directing a verdict of guilty, and that we plainly may not do.