Court Opinion

ID: 9467204
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:41:46.557031+00
Date Added: 2024-06-11T17:40:13.674148
License: Public Domain

*71CUDAHY, Circuit Judge,
concurring:
As a matter of elementary economics it is difficult for me to see why a blanket anti-rebate rule was “necessary” or “integral” to a system of maintaining fixed commissions for investors. And we may assume, in this context at least, that the Securities and Exchange Act was enacted for investor benefit. An effect of the anti-rebate rule was to tie the public (ultimate consumers) and the non-member broker-dealers (middlemen) to the same rate structures, thus effectively squeezing or squeezing out these middlemen with no apparent benefit to the public. The rule as applied to non-member broker-dealers seemingly had no effect on the public except to limit the number of broker-dealers who could economically transact New York Stock Exchange business for investors. This limitation was presumably a detriment to the investing public.
But, despite these reservations, I accept Judge Pell’s conclusions as dictated in part by the findings of the district court and, above all, by the pointed language of the Supreme Court in Gordon v. New York Stock Exchange:
“We do not believe it necessary, in the circumstances of this case, to take further evidence concerning the competitive effects of fixed rates, or the necessity of fixed rates as a keystone of the operation of exchanges under the Exchange Act. To the extent that the Court of Appeals in Thill viewed the question of implied repeal [of the antitrust laws] as a question of fact, concerning whether the particular rule itself is necessary to make the Act work, we decline to follow that lead.
The issue of the wisdom of fixed rates becomes relevant only when it is determined that there is no antitrust immunity.”
422 U.S. 659 at 687, 688, 95 S.Ct. 2598, at 2613, 2614.