Ernst & Ernst v. Hochfelder
E590643
Ernst & Ernst v. Hochfelder is a 1976 U.S. Supreme Court decision holding that private damages actions under SEC Rule 10b-5 require proof of scienter, not mere negligence.
All labels observed (1)
| Label | Occurrences |
|---|---|
| Ernst & Ernst v. Hochfelder canonical | 1 |
Statements (43)
| Predicate | Object |
|---|---|
| instanceOf |
United States Supreme Court case
ⓘ
federal court decision ⓘ securities law case ⓘ |
| appliesTo | private plaintiffs seeking damages under Rule 10b-5 ⓘ |
| areaOfLaw |
federal securities fraud
ⓘ
securities regulation ⓘ |
| citation |
425 U.S. 185
ⓘ
47 L. Ed. 2d 668 ⓘ 96 S. Ct. 1375 ⓘ |
| citationStyle | Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976) NERFINISHED ⓘ |
| clarified | mental state requirement for Rule 10b-5 liability ⓘ |
| country |
United States of America
ⓘ
surface form:
United States
|
| court | Supreme Court of the United States ⓘ |
| decisionDate | 1976-03-30 ⓘ |
| defendant | Ernst & Ernst NERFINISHED ⓘ |
| defendantType | accounting firm ⓘ |
| definedConcept | scienter in the context of Rule 10b-5 ⓘ |
| distinguishedFrom | negligence-based securities claims under other provisions of the securities laws ⓘ |
| holding |
mere negligence is insufficient to establish liability in a private damages action under Rule 10b-5
ⓘ
private damages actions under SEC Rule 10b-5 require proof of scienter ⓘ scienter is a necessary element of a Rule 10b-5 private cause of action ⓘ |
| impact |
limited Rule 10b-5 private actions to intentional or reckless misconduct
ⓘ
raised the liability standard for private securities fraud actions under Rule 10b-5 ⓘ |
| issue |
whether negligence is sufficient for private damages liability under Rule 10b-5
ⓘ
whether scienter is required for a private cause of action under Section 10(b) and Rule 10b-5 ⓘ |
| jurisdiction | United States federal law ⓘ |
| language | English ⓘ |
| legalEffect | established scienter as an element of Rule 10b-5 private damages claims ⓘ |
| legalProvisionInterpreted |
SEC Rule 10b-5
NERFINISHED
ⓘ
Section 10(b) of the Securities Exchange Act of 1934 NERFINISHED ⓘ |
| majorityOpinionBy | Justice Lewis F. Powell Jr. NERFINISHED ⓘ |
| originatingCourt | United States Court of Appeals for the Seventh Circuit NERFINISHED ⓘ |
| plaintiff | Hochfelder NERFINISHED ⓘ |
| relatedConcept |
private securities fraud class actions
ⓘ
recklessness as a form of scienter ⓘ |
| result | judgment of the court of appeals was reversed ⓘ |
| reversed | United States Court of Appeals for the Seventh Circuit NERFINISHED ⓘ |
| subjectMatter | private right of action under federal securities laws ⓘ |
| subsequentCitationBy |
Basic Inc. v. Levinson
NERFINISHED
ⓘ
Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. NERFINISHED ⓘ Tellabs, Inc. v. Makor Issues & Rights, Ltd. NERFINISHED ⓘ |
| term | 1975 Term ⓘ |
| vote | 6-3 ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.
Section 10(b) of the Securities Exchange Act of 1934
→
relatedCaseLaw
→
Ernst & Ernst v. Hochfelder
ⓘ