Court Opinion

ID: 8908830
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:20:31.891125+00
Date Added: 2024-06-11T17:08:22.908539
License: Public Domain

MULLIGAN, Circuit Judge
(dissenting):
In my view this case was properly decided by Judge Wyatt and the order and judgment dismissing the complaint should be affirmed.1 The majority announces that *628“[a]t least since J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964) ... it has been accepted in securities law that when a statutory provision imposes a duty on someone in favor of a class of protected persons, those persons may sue for the ‘statutory tort’ committed when the duty is breached.” Majority opinion at 623. The Borak rule, which liberally implied private actions in federal regulatory acts on a statutory tort theory, has been significantly restricted by more recent decisions of the Supreme Court which are misapplied by the majority opinion.2
While the majority purports to consider the factors set forth in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), it must be emphasized that Justice Brennan in his opinion in Cort carefully restricted their application: “In determining whether a private remedy is implicit in a statute not expressly providing one, several factors are relevant.” 422 U.S. at 78, 95 S.Ct. at 2088 (emphasis supplied). In Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 37, 97 S.Ct. 926, 947, 51 L.Ed.2d 124 (1977) Chief Justice Burger’s opinion similarly confined the Cort factors, noting that they are “ ‘relevant’ in determining whether a private remedy is implicit in a statute not expressly providing one.” (Emphasis supplied).
In the instant case, however, we are confronted with a statute for which Congress has clearly provided a remedy in the event of certain violations. Admittedly, section 17(a), set forth in footnote 1 of the majority opinion, does not itself include any private remedy for an infraction of its terms. It simply requires that brokers or dealers such as Weis, make, keep and preserve records and make such reports as the SEC may prescribe by its rules and regulations in the interest of the public and for the protection of investors. Other comparable sections of the ’34 Act (the Act) also provide for the filing of reports. See sections 13(a), 15 U.S.C. § 78m(a); 13(d), 15 U.S.C. § 78m(d); 13(f), 15 U.S.C. § 78m(f); and 15(a), 15 U.S.C. § 78o(d). Like section 17(a), these sections include in their text no provisions for a private remedy.
Section 17 is immediately followed, however, by section 18(a), 15 U.S.C. § 78r(a), entitled “Liability for Misleading Statements” which does provide an express private remedy for violation of the reporting provisions of the Act. It states:
Any person who shall make or cause to be made any statement in any application, report, or document filed pursuant to [the ’34 Act] or any rule or regulation thereunder . . ., which statement was . false or misleading with respect to any material fact, shall be liable to any person (not knowing that such statement was false or misleading) who, in reliance upon such statement, shall have purchased or sold a security at a price which was affected by such statement, for damages caused by such re*629liance unless the person sued shall prove that he acted in good faith and had no knowledge that such statement was false or misleading.
(Emphasis supplied).
Section 18(a) follows upon the heels of section 17. Its subject matter covers reports or documents filed pursuant to the ’34 Act and regulations promulgated thereunder. Thus, Judge Wyatt correctly found and, indeed, common sense would dictate, that section 18(a) expressly provides the sole private remedy which Congress intended to be available for a violation of section 17(a) and the other reporting sections of the ’34 Act. Furthermore, most courts which have considered the issue have found section 18(a) to contain the only remedy for violation of the Act’s reporting sections.3
It seems clear, then, that the statutory scheme enacted by Congress provides in section 18(a) an express but limited remedy for violations of section 17(a). As noted above, the Supreme Court has repeatedly limited use of the Cort factors to instances in which no statutory remedy whatsoever has been provided. Hence, it must seriously be questioned whether the Cort factors are even the appropriate analytical tool to determine whether an implied private right of action should exist for infractions of section 17(a). Nonetheless, using a Cort analysis the majority finds an implied private damage remedy because it determines that brokers’ customers are “favored wards” of, and a class “peculiarly protected” by section 17. Therefore, states the majority, we cannot assume that the Congress intended to deprive them of “the means of protection.” Majority opinion at 623.
I believe the majority reasoning is faulty in two major respects. In the first place, if the brokers’ customers were so clearly the concern of the Congress when it enacted section 17(a), its failure to afford them a private damage remedy in section 18(a), which was contemporaneously enacted and which provides a private remedy for misleading statements in reports filed pursuant to the mandate of the Act, leads to the conclusion that Congress did not intend a private damage remedy to be available to brokers’ customers.
The principle of statutory construction by which one reaches this result is somewhat forbiddingly known as “expressio unius est exdusio alterius ”. This maxim was recently emphasized and applied by the Supreme Court in National Railroad Passenger Corp. v. National Association of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974) (Amtrak). There the Court held that the plaintiff association of railroad passengers had no implied cause of action as primary beneficiaries of the Rail Passenger Service Act of 1970 since that Act expressly provided for enforcement by the Justice Department. In its opinion, the Court observed:
A frequently stated principle of statutory construction is that when legislation expressly provides a particular remedy or remedies, courts should not expand the coverage of the statute to subsume other remedies. “When a statute limits a thing to be done in a particular mode, it includes the negative of any other mode.” . This principle of statutory construction reflects an ancient maxim — ex-*630pressio unius est exclusio alterius. Since the Act creates ... a private cause of action only under very limited circumstances, this maxim would clearly compel the conclusion that the remedies created in § 307(a) are the exclusive means to enforce the duties and obligations imposed by the Act.
414 U.S. at 458, 94 S.Ct. at 693.
Soon after its decision in Amtrak the Supreme Court reaffirmed its reliance on the expressio unius principle in Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 418-19, 95 S.Ct. 1733, 44 L.Ed.2d 263 (1975). In finding that the express statutory grant to the SEC of a right to seek injunctive relief to enforce duties under the Securities Investor Protection Act precluded an implied right in others to seek similar relief, the Court reiterated its observation in Amtrak that “express statutory provision for one form of proceeding ordinarily implies that no other means of enforcement was intended by the Legislature.” Id. at 419, 95 S.Ct. at 1738.
Similarly, in the instant case the provision by Congress in section 18(a) of a narrow private cause of action for section 17(a) infractions militates strongly against our attributing to Congress a willingness to allow more expansive enforcement of the duties and obligations created by that section. Moreover, while the Court in Amtrak acknowledged that the expressio unius principle must “yield to clear contrary evidence of legislative intent,” 414 U.S. at 458, 94 S.Ct. at 693, the majority here concedes that it finds nothing in the language or legislative history of section 17(a) to indicate that Congress intended to create a private cause of action under that section. In my view appellants have failed to demonstrate the “clear contrary evidence” to rebut the conclusion that the limited express right of action under section 18(a) is the exclusive remedy for a breach of section 17(a).4
We find further support for the position that there is no private right of action implied under section 17(a) in Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). There the Court commented: “When Congress wished to provide a remedy [under the ’34 Act] to those who neither purchase nor sell securities, it had little trouble in doing so expressly” 421 U.S. at 734, 95 S.Ct. at 1925. Judge Wyatt’s opinion below reviews several such sections of the ’34 Act which impose liability on persons other than purchasers or sellers. 428 F.Supp. at 490. The presence of these provisions in the ’34 Act reinforces the conclusion that the framing of the section 18(a) remedy in terms of purchasers and sellers of securities to the exclusion of customers of broker-dealers was an intentional congressional limitation on the class for whom a private action would be available in the event of a section 17(a) violation.
The Supreme Court in Blue Chip also addressed itself specifically to section 18:
Section 18 of the 1934 Act, prohibiting false or misleading statements in reports or other documents required to be filed by the 1934 Act, limits the express remedy provided for its violation to “any per*631son . . . who . . . shall have purchased or sold a security at a price which was affected by such statement. . It would indeed be anomalous to impute to Congress an intention to expand the plaintiff class for a judicially implied cause of action beyond the bounds it delineated for comparable express causes of action.
421 U.S. at 736, 95 S.Ct. at 1925.
But that is precisely what the majority is imputing to Congress in this case. The misleading reports which create the basis for the claim here made were required to be filed by section 17(a) of the ’34 Act and the remedy provided by section 18(a) eoncededly encompasses not broker-dealer customers but only securities purchasers or sellers.5 I find that Amtrak, Barbour and Blue Chip compel the conclusion that the omission was studied and that the implication of a damage action against accountants under this section is totally unwarranted. The majority cannot properly characterize this as a case where there is no explicit private remedy provided by Congress. Rather, it is a case in which the remedy provided was designed to exclude the class which is here seeking monetary relief. Thus, the majority’s holding in my view goes beyond statutory construction; it amounts instead to judicial legislation.
II
The second flaw in the majority opinion is the failure to consider the impact of Piper v. Chris-Craft Industries, Inc. supra, in its discussion of the Cort factors. In Piper the Court, while again carefully limiting its holding to cases where the statute to be construed provides no private remedy, id. 430 U.S., at 24-25, 97 S.Ct. 926, emphasized that private relief will be implied in favor of a particular class intended to be protected by the statute only when it is “ ‘necessary’ ” to effectuate Congress’ goals. 430 U.S. at 25, 97 S.Ct. 926.6 The inquiry called for is to ascertain the congressional purpose and to determine whether a private damage action by brokers’ customers is a necessary adjunct, id., to accomplish the primary congressional goal embodied by the legislation. Cort v. Ash; supra, 422 U.S. at 84, 95 S.Ct. 2080.
The plain language of section 17 establishes the congressional concern that the SEC be kept on notice of the financial health and stability of registered broker-dealers through whom public investors purchase and sell securities.
The SEC itself has long recognized that the primary protection for brokers’ customers lies in preventive monitoring: “customers do not open accounts with a broker relying on suit, judgment and execution to collect their claim — they are opened in the belief that a customer can, on reasonable demand, liquidate his cash or securities position.” Guy D. Marianette, 11 SEC 967, 971 (1942). Hence, the broker-dealer is required to file reports which are subject to such examination as the SEC may deem necessary or appropriate in the public interest or for the protection of investors. As the majority points out, a principal and, in fact, dominant method of investor protection is the net capital rule. Section 15(c)(3) of the ’34 Act, 15 U.S.C. § 78o (c)(3), authorizes the SEC to provide safeguards with respect to the financial responsibility of broker-dealers including their “acceptance of custody and use of customers’ securities, and the carrying and use of customers’ deposits or credit balances.” Pursuant to Rule 15c(3)(l)(b)(2), 17 C.F.R. § 240.15c3-1(b)(2), the SEC exempts broker-dealers who are members in good standing of the *632New York Stock Exchange (as was Weis) from compliance with SEC net capital requirements. This is because such broker-dealers are subject to Exchange Rule 325, which is deemed by the Commission to impose requirements more comprehensive than the requirements of the SEC. Id. Under Rule 325 Weis was required to maintain a minimum prescribed ratio of aggregate indebtedness to net capital. Compliance by broker-dealers with the net capital rule is ensured by the filing of reports and monitoring by SEC as well as by the Exchange, which is authorized to enforce its regulations, see 15 U.S.C. § 78f and which, according to the SEC brief submitted on this appeal, makes annual examinations of each of its broker-dealer members to this end.
Congressional concern for the solvency of broker-dealers was not limited to the reporting and monitoring requirements of section 17. Following the boom of the 1960’s a number of brokerage firms experienced financial instability and even failure. Securities Investor Protection Corp. v. Barbour, supra, 421 U.S. at 415, 95 S.Ct. 1733. The response of Congress was the enactment in 1970 of the Securities Investor Protection Act (SIPA), 15 U.S.C. § 78aaa et seq. as an amendment to the ’34 Act. Under SIPA Congress created the Securities Investor Protection Corporation (SIPC), the function of which extends well beyond providing protection to investors upon the liquidation of their brokers. As the Court noted in Securities Investor Protection Corp. v. Barbour, supra, at 421, 95 S.Ct. at 1739:
The SIPC properly treats an application for the appointment of a receiver and liquidation of a brokerage firm as a last resort. It maintains an early-warning system and monitors the affairs of any firm that it is given reason to believe may be in danger of failure.
The SEC too has noted that the primary purpose of the net capital requirements for broker-dealers is to give “the [SEC], self-regulators and SIPC sufficient early warning to take appropriate action to protect customers prior to the time ... of liquidation.” 1934 Act Release No. 11497, June 26, 1975 [1975-76 Transfer Binder], CCH Fed.Sec.L.Rep. H 80,212.
The majority here finds that since section 18(a) leaves broker-dealer customers without protection and since brokers’ customers are the “favored wards” of section 17, it cannot agree that Congress simultaneously sought to protect them and to deprive the class of the means of protection. However, a review of section 17(a) and the rules promulgated by the SEC as well as the creation of SIPC, demonstrates that the means Congress employed to ensure solvency of broker-dealers were to require the keeping and filing of records, the maintenance of certain net capital balances and the oversight of the SEC, SIPC and the Exchanges. Thus, the primary congressional intent obviously has been to provide a system of reports and monitoring which would prevent insolvency of broker-dealers; not to create private law suits for damages after insolvency has occurred.7
Since the filing requirements of section 17(a) are designed to give early warning, the importance to this scheme of implying a damage remedy after liquidation is dubious. Congress made no suggestion either in 1934 or in 1970, when it enacted SIPA, that a private damage action was a necessary corollary of the section 17(a) reporting provisions. The threat of liquidation under SIPA as well as the criminal sanctions available for violations of section 17(a) certainly present a greater deterrent than private damage actions.8 As the Supreme *633Court noted in Piper, “Nor can we agree that an ever-present threat of damages [beyond available injunctive relief] . will provide significant additional protection . . . . The deterrent value, if any, of such awards can never be ascertained with precision.” 430 U.S. at 39 — 40, 97 S.Ct. at 948.
Even more importantly, to the extent that a threat of private damage actions might further induce compliance with the reporting scheme of section 17 the majority has discounted the effect of available state law remedies, which arise not from state securities law protection of brokers’ customers, but from well established tort law principles.9 See, e. g., Restatement 2d of Torts §§ 531, 552 (1977). Common law actions for damages against accountants have long been recognized. See, e. g., Note, Accountants’ Liabilities For False and Misleading Financial Statements, 67 Colum.L.Rev. 1437 (1967). Where, as in the instant case, fraud is arguably alleged, it is important to note that should the actionable elements of fraud be provable, the states have universally permitted recovery to third parties who relied on the misrepresentations. Anno.: Liability of Public Accountant to Third Parties, 46 A.L.R.3d 979, 982-83 (1972). While the state law treatment of actions based only on an accountant’s negligence has not been so uniform, id. at 982, the trend in state law, based on generally recognized tort principles, has been to expand the accountant’s liability for negligence to those clearly definable classes of third parties who the accountant knew would rely on the statements in question. See, e. g., White v. Guarente, 43 N.Y.2d 356, 401 N.Y.S.2d 474, 372 N.E.2d 315 (1977); Restatements 2d of Torts § 552 (1977). In fact, should scienter be held a required element of the action found implied by the majority in section 17,10 see Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976), it may well be that a state law action would provide a broader basis for accountant liability than the federal action implied here under the ’34 Act.
In any event, the very existence of these state law remedies supplies that threat of liability which the majority essentially is seeking in order to promote adherence to the requirements under section 17(a). Thus, the majority wrongly dismisses the significance of available state law remedies on the ground that the standard of liability for private damage actions in connection with 17(a) violations must be national in scope. Since, as demonstrated above, the primary congressional purpose underlying the section 17 reporting scheme is prophylactic, uniformity of standards for actions brought to recover losses after the brokerage firm has failed simply is not necessary to achieving the primary goals of that statute. See Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 477-78, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977).
The SEC has also argued, and the majority has accepted the position, that private damage actions are a necessary supplement to commission action because the SEC does not have the resources to audit the financial statements submitted under section 17(a). Whatever force this argument might once have had, see J. I. Case Co. v. Borak, supra, 377 U.S. at 432, 84 S.Ct. 1555, is seriously undermined by the Court’s observation in Piper that “institutional limitations alone do not lead to the conclusion that any party . should have a cause of action for damages.” 430 U.S. at 41, 97 S.Ct. at 949. The argument that a regulatory agency is confessedly unable properly to regulate broker-dealers as charged by Congress and de*634tailed by its own regulations, and that therefore the federal courts should find a damage remedy implicit in an act which studiously avoided giving one to the class sought to be represented here, is simply unpersuasive.11
In sum, I conclude that since section 18(a) of the Act does provide a damage remedy for the filing of misleading statements in section 17(a) reports, and since this remedy excludes from its coverage the customers of broker-dealers, the Cort factors employed by the majority afford an inappropriate analytical framework for this case. Instead, under the reasoning of Amtrak and Barbour it is apparent that by limiting actions under section 18(a) to purchasers and sellers of securities Congress expressed its intent to deny recovery for section 17(a) violations to a broader class of plaintiffs. Nor have the appellants here adduced the strong contrary evidence of legislative intent regarding section 17(a) which would lead me to reach the conclusion, embraced by the majority, that implication of such a remedy is consistent with the legislative scheme. Moreover, even if the Cort factors were the proper mode of analysis in this case, they must be applied in conjunction with the gloss of Piper: Yet there is no showing here that a private damage remedy against accountants is necessary to vindicate the primary congressional purpose embodied in section 17(a). As Judge Medina observed in Lank v. New York Stock Exchange, 548 F.2d 61, 65 (2d Cir. 1977) where we refused to imply a private remedy in favor of the receiver of an insolvent broker-dealer against the Exchange: “Even were we to agree . . . that granting him a right of action against the Exchange would ‘accord’ with the purpose of the [1934] Act, our function here is to discern the intent of Congress, not to legislate in its place.”
Ill
Having found no implied cause of action arising under section 17(a) in favor of customers of broker-dealers, I could of course find no derivative rights in either SIPC or the trustee. However, I also contest the holding that appellants are proper parties to maintain the action found by the majority to be implied in section 17(a). The majority has properly held that neither the trustee nor SIPC in its own right can bring any action under section 17(a) of the ’34 Act. Neither can claim to be an intended beneficiary of that act since both are the creatures of SIPA, enacted in 1970. Nor is either appellant a public investor. Lank v. New York Stock Exchange, supra, 548 F.2d at 64-66 is dispositive of this issue.
Yet while denying to SIPC the right to bring a section 17(a) action on its own behalf, the majority also transmutes that entity into a subrogee clothed with the power in that capacity to bring a private damage action under 17(a) (an action itself now implied by the majority for the first time in the forty-four years section 17 has been on the books). By what alchemy a congressionally created corporation with limited powers to litigate, see Securities Investor Protection Corp. v. Barbour, supra, can now sue in a federal court for an alleged violation of section 17(a) of the ’34 Act, is not made clear. When Congress created SIPC, its express but limited rights of subrogation were spelled out in SIPA: “To the extent that moneys are advanced by SIPC to the trustee to pay the claims of customers, SIPC shall be subrogated to the claims of such customers with the rights and priorities provided in this section.” 15 U.S.C. § 78fff(f)(l). As the majority recognizes, those claims to which SIPC is subrogated by statute are clearly against the debtor’s estate only and no rights against the accountant flow therefrom. Since Congress has delineated the subrogation rights of SIPC, its failure to provide for subrogation against any third party would clearly dic*635tate that none exist under the previously discussed principle: expressio unius est ex-clusio alterius. Rogers v. National Surety Co., 116 Neb. 170, 216 N.W. 182 (1927). The effect of the majority’s extension of SIPC’s subrogation rights is to circumvent the intent of Congress by ignoring the directive of SIPA that SIPC be subrogated “with the rights and priorities provided in this section.” 15 U.S.C. § 78fff(f)(l) (emphasis supplied).
Similarly, the Trustee, held by the majority to have no direct cause of action under section 17(a), is nonetheless found to have such capacity in his role as a bailee. The majority finds that his responsibility to marshal and return property to the customers of the debtor broker-dealer authorizes him to bring this action. But that responsibility of the Trustee is created by SIPA, 15 U.S.C. § 78fff(a)(l), and is inherent in his Trustee function, see also 15 U.S.C. § 78fff(b)(1). Having rejected his right to sue as a Trustee of Weis under Lank v. New York Stock Exchange, supra, I fail to see how denominating him a bailee adds a jot or a tittle to his statutorily created status as the representative of Weis — an entity regulated by, and precluded from suing under, the Act. Furthermore, the customers on whose behalf the Trustee seeks to maintain suit are not only entitled to bring, but have already initiated their own action against Touche Ross. See notes, 3, 9, supra. The SEC understandably has expressed no view on this point.
For these reasons I respectfully dissent and would affirm Judge Wyatt’s decision below.

. The majority comments in footnote 3 that its decision has been materially aided by the brief amicus curiae submitted on appeal by the SEC and that Judge Wyatt did not have the advantage of the SEC’s position in this matter. The Supreme Court, however, in Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 41 n. 27, 97 S.Ct. 926, 949, 51 L.Ed.2d 124 (1977) observed that “. . . its [the SEC’s] ‘expertise’ in the securities-law field is of limited value when the narrow legal issue is one peculiarly reserved for judicial resolution, namely whether a cause of action should be implied by judicial interpretation in favor of a particular class of litigants.” That, of course, is the principal issue in this case as well. It should also be added that a substantial part of .the SEC brief is devoted to the argument that SIPC in its own right may assert a private right of action for violations of section 17 of the ’34 Act. This proposition was not only rejected below but was repudiated by the majority in its footnote 13.
I do not “disparage”, as my Brother Timbers would have it, the brief of the SEC. I simply *628do not agree with it — neither does the majority, at least to the extent I have indicated. Nor do I dispute the propriety of its submission. I cannot believe that disagreement with the opinions of any agency can sensibly discourage the filing of a brief expressing its views as amicus curiae (sed non parens curiae). It remains the function of the bench to construe the law as best it can even though that involves on occasion disagreement with one’s colleagues or even an agency.

. These decisions discussed in the text, infra, include Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 97 S.Ct. 926, 51 L.Ed.2d 124 (1977); Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975); Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 95 S.Ct. 1733, 44 L.Ed.2d 263 (1975); National Railroad Passenger Corp. v. National Association of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974) (Amtrak); see Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). Numerous commentators have acknowledged the substantial retreat from Borak represented by these subsequent Supreme Court rulings. E. g., Climan, Civil Liability Under the Credit-Regulation Provisions of the Securities Exchange Act of 1934, 63 Cornell L.Rev. 206, 261-69 (1978); Comment, Implying Private Causes of Action From Federal Statutes: Amtrak and Cort Apply the Brakes, 17 B.C.Ind. & Com.L.Rev. 53, 64 (1975); Comment, Private Rights of Action Under Amtrak and Ash: Some Implications for Implication, 123 U.Pa.L.Rev. 1392, 1416 (1975); Note, Implication of Private Actions from Federal Statutes: From Borak to Ash, 1 J.Corp.Law 371 (1976); 30 Vand.L.Rev. 905, 908-10 (1977).

. Meer v. United Brands Co., [1976-77 Transfer Binder] CCH Fed.Sec.L.Rep. 1! 95,648 at p. 90,-213 (S.D.N.Y.1976); duPont v. Wyly, 61 F.R.D. 615, 628 (D.Del.1973); In re Penn Central Securities Litigation, 347 F.Supp. 1327, 1340 (E.D.Pa.1972), relevant point adhered to on reargument, 357 F.Supp. 869 (E.D.Pa.1973), aff'd, 494 F.2d 528, 539-40 (3d Cir. 1974); see Myers v. American Leisure Time Enterprises, Inc., 402 F.Supp. 213, 214 (S.D.N.Y.1975), affd without opinion, 538 F.2d 312 (2d Cir. 1976). But see the district court cases discussed in In re Penn Central Securities Litigation, supra, 494 F.2d at 540 n. 18.
it should be noted that in a case related to that at bar the customers of Weis brought a class action against Touche Ross alleging, inter alia, that Touche Ross’ certification of the same financial statements involved here was in violation of Rule 17a-5, 17 C.F.R. § 240.17a-5 and gave the customers a cause of action under section 18(a). Rich v. Touche Ross & Co., 415 F.Supp. 95, 101-02 (S.D.N.Y.1976). Judge Brieant dismissed the complaint, finding that since the plaintiffs did not meet the purchaser-seller requirements of 18(a) they stated no claim for the alleged violation of Rule 17a-5. Id. at 102-04.

. I do not overlook Judge Timbers’ recent opinion in Abrahamson v. Fleschner, 568 F.2d 862 (2d Cir. 1977), petition for cert. filed, 46 U.S. L.W. 3588 (U.S. March 21, 1978) (No. 77-1279), which the majority cites to distinguish Amtrak and Barbour on the ground that those cases did not involve implication of private actions under the securities acts. It is important to note that in Abrahamson, where the court found a private right of action for damages implied for violations of section 206 of the Investment Advisers Act, 15 U.S.C. § 80b-6, Judge Timbers, in his opinion for the majority, repeatedly stressed that the Investment Advisers Act made absolutely no provision for express private actions. Id. at 872, 874, 875. The opinion in Abrahamson contrasts this omission to those other securities acts which contain “sections expressly granting injured parties a private action for damages.” Id. at 874 (emphasis in original); see Piper v. Chris-Craft Industries, Inc., supra, 430 U.S., at 24-25, 97 S.Ct. 926. Indeed, in this connection the opinion then refers specifically to section 18 of the ’34 Act. Id. at 874 n. 20. Judge Timbers concluded: “Had Congress provided explicitly for private damage actions it would be unnecessary to consider whether the remedy should be judicially implied.” Id. at 875. This conclusion in Abrahamson is in fact strongly supportive of the analysis in this dissent.

. It should be noted that in another suit arising out of the Weis debacle Judge Wyatt has sustained a section 18(a) claim asserted by a plaintiff bank which allegedly purchased securities of Weis in reliance on the section 17(a) reports involved in this case. Exchange National Bank v. Touche Ross & Co., 75 Civ. 916 (S.D.N.Y.).

. The underscoring of the element of necessity three times in the Piper opinion, 430 U.S. at 25, 97 S.Ct. 926, indicates the emphasis the Court wished to bring to this factor in determining whether a private remedy should be implied. Piper, therefore, is not simply a restatement or affirmation of Cort but adds a significant gloss. Wilson v. First Houston Investment Corp., 566 F.2d 1235, 1239, 1240 (5th Cir. 1978).

. In fact SIPC’s preventive measures have been quite successful. The vast majority of firms brought to SIPC’s attention have been deterred from the necessity of undergoing a SIPC liquidation through a variety of tactics including mergers and withdrawal from the business of carrying customer accounts. See Securities Investor Protection Corp. v. Barbour, supra, 421 U.S., at 421 n. 4, 95 S.Ct. 1733.

. For example, in the instant situation the SEC initiated an action for injunctive relief against Weis and its officers. SEC v. Weis Securities, Inc., 73 Civ. 2332 (S.D.N.Y.). A number of Weis’ principals were also convicted of a crimi*633nal conspiracy to falsify Weis’ books of account. See Rich v. Touche Ross & Co., supra, 415 F.Supp. at 101.

. The same cannot be said of the appellants herein. In addition to the state law class action against Touche Ross which has been filed by Weis’ customers in the Supreme Court of New York County, see Rich v. Touche Ross & Co., supra, 415 F.Supp. at 104, the appellants have initiated a state law action based on the same common law claims set forth in their complaint in this federal action. Redington v. Touche Ross & Co., No. 13996/76 (Sup.Ct.N.Y.Co.).

. The point was reached neither by the majority here nor by Judge Wyatt below.

. The problem faced by the SEC in Borak of examining proxy statements under demanding time limitations (10 days or even 2 days, 17 C.F.R. §§ 240.14a-6(a), (b)), as pointed out by Judge Wyatt, 428 F.Supp. at 491, is not encountered here. Moreover, the SEC itself has stated that its burdens in this connection are lightened by the Exchange, which makes annual examinations of net capital statements by its members.