SEC v. Zandford
United States Supreme Court
535 U.S. 813 (2002)
Relevant factsFree
Elderly investor Wood hired Zandford (defendant) to manage his investments to provide for his disabled daughter, but by the time Wood died, his entire savings were gone, diverted by Zandford for his own use; the SEC (plaintiff) sued for securities fraud, the district court ruled for the SEC, and the court of appeals reversed, finding the misappropriation was not connected to any securities transaction.
IssueFree
Whether a connection with the purchase or sale of a security, for securities-fraud purposes, exists when a fraudulent scheme and the sale of securities coincide.