SmartBrief
Confirm favorite deletion?
Business Assoctiations Keyed to Gabalson, 3rd Ed.
Ernst & Ernst v. Hochfelder
Citation:
425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976)Facts
Ernst & Ernst was an accounting firm retained by First Securities Company of Chicago from 1946 through 1967 to perform periodic audits and prepare annual reports required by the SEC. Leston B. Nay, president and 92% owner of First Securities, perpetrated a fraudulent scheme by inducing customers to invest in “escrow accounts” that he claimed would yield high returns. In reality, Nay immediately converted these funds to his own use. The fraud came to light in 1968 when Nay committed suicide, leaving a note describing the escrow accounts as “spurious.” The plaintiffs, who were customers of First Securities, sued Ernst & Ernst under Section 10(b) and Rule 10b-5, claiming that Ernst & Ernst had “aided and abetted” Nay’s violations through negligent failure to conduct proper audits. Specifically, they alleged that Ernst & Ernst failed to discover Nay’s “mail rule” (that only he could open mail addressed to him), which they claimed was an irregular procedure that would have led to discovery of the fraud had it been reported to regulatory authorities.
Only StudyBuddy Pro offers the complete Case Brief Anatomy*
Access the most important case brief elements for optimal case understanding.
*Case Brief Anatomy includes: Brief Prologue, Complete Case Brief, Brief Epilogue
- The Brief Prologue provides necessary case brief introductory information and includes:
Topic:
Identifies the topic of law and where this case fits within your course outline.Parties:
Identifies the cast of characters involved in the case.Procedural Posture & History:
Shares the case history with how lower courts have ruled on the matter.Case Key Terms, Acts, Doctrines, etc.:
A case specific Legal Term Dictionary.Case Doctrines, Acts, Statutes, Amendments and Treatises:
Identifies and Defines Legal Authority used in this case.
- The Case Brief is the complete case summarized and authored in the traditional Law School I.R.A.C. format. The Pro case brief includes:
Brief Facts:
A Synopsis of the Facts of the case.Rule of Law:
Identifies the Legal Principle the Court used in deciding the case.Facts:
What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case.Issue(s):
Lists the Questions of Law that are raised by the Facts of the case.Holding:
Shares the Court's answer to the legal questions raised in the issue.Concurring / Dissenting Opinions:
Includes valuable concurring or dissenting opinions and their key points.Reasoning and Analysis:
Identifies the chain of argument(s) which led the judges to rule as they did.
- The Brief Prologue closes the case brief with important forward-looking discussion and includes:
Policy:
Identifies the Policy if any that has been established by the case.Court Direction:
Shares where the Court went from here for this case.