John Marshall Harlan II

“ In effect the Court of Appeals simply held that the terms of the statute require, at least, some proof that an investment adviser's recommendations are not disinterested.
I think it clear that what was shown here would not make out a case of fraud or breach of fiduciary relationship under the most expansive concepts of common law or equitable principles. The nondisclosed facts indicate no more than that the respondents personally profited from the foreseeable reaction to sound and impartial investment advice. ”

“ There the failure of a fiduciary to disclose that his advice was prompted by a 'bribe' was equated by the trial judge with deceit. Such a decision can hardly be deemed to establish that any nondisclosure of a fact material to the recipient of investment advice is fraud or deceit. ”

“ Saying the least, it strains credulity that a provision expressly proscribing material omissions would be thought by Congress to be 'surplusage' when it came to enacting the 1940 Act. This is particularly so when it is remembered that violation of the fraud and deceit section is punishable criminally (§ 217 of the Investment Advisers Act of 1940, 54 Stat. 857) ; Congress must have known that the courts do not favor expansive constructions of criminal statutes. ”