11 preexisting duty to the victims of the fraud” because of “its participation in a concealed side agreement with the developer” to use an outdated appraisal in bringing a new bond offering to market. Brief for Respondents, No. 92-854, available at 1993 WL 407323, at *1-2, 7-8. Likewise, the SEC, as amicus in support of the Central Bank plaintiffs, said that the defendant engaged in “affirmative action, not merely silence or inaction.” Brief for the United States as Amicus Curiae, No. 92-854 available at 1992 WL 12006433, at *5. This Court reversed, holding that “[a]s in earlier cases considering conduct prohibited by § 10(b), we again conclude that the statute prohibits only the making of a material misstatement (or omission) or the commission of a manipulative act.” Central Bank, 511 U.S. at 177 (emphasis added). Likewise in O’Hagan, this Court made clear that conduct by a defendant who did not speak to the market—trading on inside information—was “deceptive” under § 10(b) only when that defendant breached a duty to disclose. See United States v. O’Hagan, 521 U.S. 642, 660 (1997) (“[I]t was O’Hagan’s failure to disclose his personal trading to [his client and law firm], in breach of his duty to do so, that made his conduct ‘deceptive’ within the meaning of § 10(b).”) (emphasis added; alterations in original omitted).6 Petitioner incorrectly argues that a duty to disclose requirement would exclude “conduct” from § 10(b) and 6
This Court also has held that common law concealment and suppression require a duty to disclose. Strong v. Repide, 213 U.S. 419, 430 (1909) (“concealment is equivalent to misrepresentation” by insider purchasing stock from minority shareholder where “it was the duty of the party who obtained the consent, acting in good faith, to have disclosed the facts which he concealed”) (emphasis added), cited in Chiarella, 445 U.S. at 228 n.10; Stewart v. Wyoming Cattle-Ranche Co., 128 U.S. 383, 388 (1888) (“if, with intent to deceive, either party to a contract of sale conceals or suppresses a material fact which he is in good faith bound to disclose, this is evidence of and equivalent to a false representation”) (emphasis added).
