914 F.2d 1564 (1990)
Plaintiffs appealed from a summary judgment in favor of defendants in an action to recover losses under various antifraud provisions. Plaintiffs were investors who sought to recover losses from defendant brokerage firm and defendant financial counseling firm for not disclosing a prior forgery conviction of defendant securities agent.
- On appeal, the court affirmed the summary judgment in favor of defendant financial counseling firm, holding that it was not a registered broker-dealer nor did it engage in the sale of securities.
- The court affirmed summary judgment in favor of the defendant brokerage firm on all federal claims except three.
- Defendant brokerage firm was liable for its agent's wrongdoing as a controlling person under§20(a) of the Securities and Exchange Act of 1934, 15 U.S.C.S. §78t(a), and §15 of the Securities Act of 1933, 15 U.S.C.S. §77o.
- The court held that the agent was lawfully engaged in the securities business after being registered or associated with the defendant brokerage firm. The distinction between independent contractors and agents was irrelevant.
The court affirmed summary judgment in favor of defendant financial counseling firm because it was not a broker-dealer. The court affirmed summary judgment in favor of defendant brokerage firm regarding the scienter requirement, holding that plaintiffs failed to raise a triable issue of fact. The court did not affirm defendant brokerage firm's secondary liability under the statute respondeat superior.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials