SmartBrief
Confirm favorite deletion?
Securities Regulation, Keyed to Choi
Ernst & Ernst v. Hochfelder
Citation:
425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976)Facts
Respondents were customers of First Securities Company of Chicago who, from 1942 through 1966, invested funds in what president Leston B. Nay represented as high-yield “escrow” accounts. In reality, no such accounts existed, and Nay immediately converted the funds to his personal use. These transactions were not reflected in First Securities’ books, records, or filings with the SEC or the Midwest Stock Exchange. Ernst & Ernst, retained as First Securities’ auditor, conducted periodic audits and prepared annual reports but failed to discover Nay’s “mail rule”—a practice whereby only Nay could open mail addressed to him or to his attention at First Securities. Respondents alleged that proper auditing procedures would have revealed this irregular practice, leading to discovery of the fraud. The fraud was exposed in 1968 when Nay committed suicide, leaving a note describing the escrow accounts as “spurious.” Respondents specifically disclaimed any allegation of intentional fraud or misconduct by Ernst & Ernst, proceeding solely on a theory of negligent nonfeasance.
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.