Page:Francis V. Lorenzo v. Securities and Exchange Commission.pdf/11

8 marks omitted)). As we have explained, these laws marked the “first experiment in federal regulation of the securities industry.” SEC v. Capital Gains Research Bureau, Inc., 375 U. S. 180, 198 (1963). It is “understandable, therefore,” that “in declaring certain practices unlawful,” it was thought prudent “to include both a general proscription against fraudulent and deceptive practices and, out of an abundance of caution, a specific proscription against nondisclosure” even though “a specific proscription against nondisclosure” might in other circumstances be deemed “surplusage.” Id., at 198–199. “Each succeeding prohibition” was thus “meant to cover additional kinds of illegalities—not to narrow the reach of the prior sections.” United States v. Naftalin, 441 U. S. 768, 774 (1979). We have found “‘no warrant for narrowing alternative provisions… adopted with the purpose of affording added safeguards.’” Ibid. (quoting United States v. Gilliland, 312 U. S. 86, 93 (1941)); see Affiliated Ute Citizens of Utah v. United States, 406 U. S. 128, 152–153 (1972) (While “the second subparagraph of [Rule 10b–5] specifies the making of an untrue statement… [t]he first and third subparagraphs are not so restricted”). And since its earliest days, the Commission has not viewed these provisions as mutually exclusive. See, e. g., In re R. D. Bayly & Co., 19 S. E. C. 773 (1945) (finding violations of what would become Rules 10b–5(b) and (c) based on the same misrepresentations and omissions); In re Arthur Hays & Co., 5 S. E. C. 271 (1939) (finding violations of both §§17(a)(2) and (a)(3) based on false representations in stock sales).

The idea that each subsection of Rule 10b–5 governs a separate type of conduct is also difficult to reconcile with the language of subsections (a) and (c). It should go without saying that at least some conduct amounts to “employ[ing]” a “device, scheme, or artifice to defraud” under subsection (a) as well as “engag[ing] in a[n] act… which operates… as a fraud” under subsection (c). In Affiliated