Page:Francis V. Lorenzo v. Securities and Exchange Commission.pdf/22

4 U. S. C. §78j(b). Rule 10b–5 was promulgated under this statutory authority. That Rule makes it unlawful, in connection with the purchase or sale of any security,
 * “(a) To employ any device, scheme, or artifice to defraud,
 * “(b) To make any untrue statement of a material fact…, or
 * “(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit….” 17 CFR §240.10b–5.

The Court of Appeals also held that Lorenzo violated §17(a)(1) of the 1933 Act. Similar to Rule 10b–5, §17(a) of the Act provides that it is unlawful, in connection with the offer or sale of a security,
 * “(1) to employ any device, scheme, or artifice to defraud, or
 * “(2) to obtain money or property by means of any untrue statement of a material fact…; or
 * “(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.” 15 U. S. C. §77q(a)(1).

We can quickly dispose of Rule 10b–5(a) and §17(a)(1). The act of knowingly disseminating a false statement at the behest of its maker, without more, does not amount to “employ[ing] any device, scheme, or artifice to defraud” within the meaning of those provisions. As the contemporaneous dictionary definitions cited by the majority make clear, each of these words requires some form of planning, designing, devising, or strategizing. See ante, at 6. We have previously observed that “the terms ‘device,’ ‘scheme,’ and ‘artifice’ all connote knowing or intentional practices.” Aaron v. SEC, 446 U. S. 680, 696 (1980) (emphasis added). In other words, they encompass “fraudulent scheme[s],”