Supreme Court of the United States · 2008-01-15
15usc78j: author: Astra2 · not independently reviewed
Case and law context
Role: applied; posture: private securities class action; supplier defendants dismissed under Rule 12(b)(6); majority opinion; result: claimant-lost; claim:
Uncertainty
None recorded
Misfit
No aiding-and-abetting element is invented. The nonverbal-conduct rule does not eliminate reliance in private suits or resolve SEC liability on this record.
The short reliance rule excerpt ends inside the source word action at the chosen slice boundary. It remains exact and frozen; the complete held quotes supply the operative reliance conclusion.
B · Case × element grid
Top-level elements follow claim order in panels of up to six elements. Case rows repeat across panels. Every recorded block retains its holding and basis; multiple blocks are not merged into a case-level verdict. ✓ satisfied · ✗ not satisfied · ○ not reached · · not addressed. Muted blocks are not counted. Sub-element evidence remains on case and element pages.
Elements 1–6 of 12
| Case | Statutory commerce, mails, or exchange facility | Section 78j(b) rulemaking hook | Materially false statement or misleading half-truth | Importance to a reasonable investor | Intent to deceive, manipulate, or defraud | Connection with a covered securities or swap transaction |
|---|---|---|---|---|---|---|
| Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. — 552 U.S. 148 (2008) · Supreme Court of the United States · 2008 (15usc78j: author: Astra2 · not independently reviewed) | · not addressed | · not addressed | · not addressed | · not addressed | · not addressed | · not addressed |
Elements 7–12 of 12
| Case | Private plaintiff's purchaser or seller status | Private investor transaction causation | Actual economic loss in private damages action | Causal connection between fraud and economic loss | Fraudulent scheme or deceptive course of business | Additional criminal mental-state requirement |
|---|---|---|---|---|---|---|
| Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. — 552 U.S. 148 (2008) · Supreme Court of the United States · 2008 (15usc78j: author: Astra2 · not independently reviewed) | · not addressed | · not addressed | · not addressed | ○ not reached · basis not recordedNot counted: rule-announced/merits | · not addressed |
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Pattern | Exact source quotations |
|---|---|---|---|---|
| Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. — 552 U.S. 148 (2008) · Supreme Court of the United States · 2008 — not · pleaded (15usc78j: author: Astra2 · not independently reviewed) | Private investor transaction causation | not Counted merits instance applied / merits basis: pleaded; party: Scientific-Atlanta and Motorola; subject: party=Scientific-Atlanta and Motorola The sham transactions plausibly enabled Charter's misstatement, but investors relied on Charter's statements; supplier acts were neither public nor subject to a disclosure duty. Reliance cannot be inferred merely from foreseeable effects on the issuer's financial report. | undisclosed-roundtrip-transactions | Respondents supplied Charter with the digital cable converter (set-top) boxes that Charter furnished to its customers. Charter arranged to overpay respondents $20 for each set-top box it purchased until the end of the year, with the understanding that respondents would return the overpayment by purchasing advertising from Charter. The transactions, it is alleged, had no economic substance; but, because Charter would then record the advertising purchases as revenue and capitalize its purchase of the set top boxes, in violation of generally accepted accounting principles, the transactions would enable Charter to fool its auditor into approving a financial statement showing it met projected revenue and operating cashflow numbers. Respondents agreed to the arrangement.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [2682:3457] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.To return the additional money from the set top box sales, Scientific-Atlanta and Motorola signed contracts with Charter to purchase advertising time for a price higher than fair value. The new set-top box agreements were backdated to make it appear that they were negotiated a month before the advertising agreements. The backdating was important to convey the impression that the negotiations were unconnected, a point Arthur Andersen considered necessary for separate treatment of the transactions. Charter recorded the advertising payments to inflate revenue and operating cash-flow by approximately $17 million. The inflated number was shown on financial statements filed with the Securities and Exchange Commission (SEC) and reported to the public.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [4245:4999] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.Respondents had no role in preparing or disseminating Charter’s financial statements. And their own financial statements booked the transactions as a wash, under generally accepted accounting principles. It is alleged respondents knew or were in reckless disregard of Charter’s intention to use the transactions to inflate its revenues and knew the resulting financial statements issued by Charter would be relied upon by research analysts and investors.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [5000:5454] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.Reliance by the plaintiff upon the defendant’s deceptive acts is an essential element of the § 10(b) private cause of actSource: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [12196:12317] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.Neither presumption applies here. Respondents had no duty to disclose; and their deceptive acts were not communicated to the public.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [13253:13385] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.In all events we conclude respondents’ deceptive acts, which were not disclosed to the investing public, are too remote to satisfy the requirement of reliance.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [16214:16373] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75. |
| Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. — 552 U.S. 148 (2008) · Supreme Court of the United States · 2008 — not reached (15usc78j: author: Astra2 · not independently reviewed) | Fraudulent scheme or deceptive course of business | not_reached Excluded from merits counts rule-announced / meritsThe Court rejects a categorical statements-only restriction, then disposes of the private claim on reliance. It expressly declines to evaluate the transaction-connection requirement. | deceptive-conduct/backdated-supply-contracts | So that Arthur Andersen would not discover the link between Charter’s increased payments for the boxes and the advertising purchases, the companies drafted documents to make it appear the transactions were unrelated and conducted in the ordinary course of business. Following a request from Charter, Scientific-Atlanta sent documents to Charter stating — falsely—that it had increased production costs. It raised the price for set-top boxes for the rest of 2000 by $20 per box. As for Motorola, in a written contract Charter agreed to purchase from Motorola a specific number of set-top boxes and pay liquidated damages of $20 for each unit it did not take. The contract was made with the expectation Charter would fail to purchase all the units and pay Motorola the liquidated damages.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [3458:4244] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75.If this conclusion were read to suggest there must be a specific oral or written statement before there could be liability under § 10(b) or Rule 10b-5, it would be erroneous. Conduct itself can be deceptive, as respondents concede.Source: docroot/ir/caselaw/us_552.jsonl#/us/552/0148-01; Unicode character offsets [11329:11560] (end exclusive); SHA-256 854d7d302812e017c170afe5ca783eb9bff59da2a6e8cb45147e391cf8970a75. |