Dolphin & Bradbury, Inc. v. Securities and Exchange Commission

Dolphin & Bradbury (defendant) underwrote a municipal bond offering for a building purchase, and its CEO Bradbury (defendant) learned before the offering that the building's main tenant, a state agency, planned to vacate at its lease's end, information available only through a local newspaper article and remarks at a public meeting. Bradbury did not disclose this in the offering's key disclosure document and instead represented that current lease rates would continue for years. The tenant did leave, the building became more than half vacant, and bondholders eventually forced it into receivership. The SEC found Bradbury acted with scienter in failing to disclose the material information, and Bradbury appealed.