Vanderbilt Law Review


Andrew Bor

First Page



The Securities Exchange Act of 1934 created the Securities and Exchange Commission (SEC) and vested it with broad regulatory and enforcement powers. While one of the purposes of the Act is to protect investors, the SEC has long recognized that it lacks the resources to fully accomplish that goal. Consequently, plaintiffs injured by actions in violation of the Act have sought remedies in the federal courts that have been willing to imply private rights of action under the securities laws. Recently, however, the Supreme Court has indicated that it will restrict the scope of remedies available to private litigants, thus creating confusion about implication, particularly in the field of securities. Despite this trend, the Second Circuit has recently implied a remedy in favor of private litigants under two securities statutes that previously had not been read to create a right of action.' This apparent conflict between the Supreme Court and the Second Circuit underlines existing uncertainty concerning the continued availability of implied remedies and emphasizes the need for a sound analytical framework within which courts can produce consistent results in implication. This Recent Development will review implication in the securities area, focusing on the most recent Second Circuit decision creating an implied remedy under section 17 of the Securities Exchange Act of 1934, and analyzing the scope of that remedy and its impact on potential private litigants.