NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

HOLMES v. SECURITIES INVESTOR PROTECTION
CORPORATION et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 90-727.   Argued November 13, 1991-Decided March 24, 1992

Pursuant to its authority under the Securities Investor Protection Act
 (SIPA), respondent Securities Investor Protection Corporation (SIPC)
 sought, and received, judicial decrees to protect the customers of two
 of its member broker-dealers.  After trustees were appointed to
 liquidate the broker-dealers' businesses, SIPC and the trustees filed
 this suit, alleging, among other things, that petitioner Holmes and
 others had conspired in a fraudulent stock-manipulation scheme that
 disabled the broker-dealers from meeting obligations to customers;
 that this conduct triggered SIPC's statutory duty to advance funds to
 reimburse the customers; that the conspirators had violated the
 Securities Exchange Act of 1934 and regulations promulgated there-
 under; and that their acts amounted to a ``pattern of racketeering
 activity'' within the meaning of the Racketeer Influenced and Corrupt
 Organizations Act (RICO), 18 U.S.C. 1962, 1961(1) and (5), so as
 to entitle the plaintiffs to recover treble damages, 1964(c).  The
 District Court entered summary judgment for Holmes on the RICO
 claims, ruling, inter alia, that SIPC did not meet the ``purchaser-
 seller'' requirement for standing under RICO.  The Court of Appeals
 held the finding of no standing to be error and, for this and other
 reasons, reversed and remanded.
Held:SIPC has demonstrated no right to sue Holmes under 1964(c).
 Pp.6-17.
   (a)A plaintiff's right to sue under 1964(c)-which specifies that
 ``[a]ny person injured . . . by reason of a violation of [1962] may sue
 therefor . . . and . . . recover threefold the damages he sustains
 . . .''-requires a showing that the defendant's violation was the
 proximate cause of the plaintiff's injury.  Section 1964(c) was modeled
 on 4 of the Clayton Act, which was itself based on 7 of the Sher-
 man Act, see Associated General Contractors of Cal., Inc. v. Carpen-
 ters, 459 U.S. 519, 530, and both antitrust sections had been
 interpreted to incorporate common-law principles of proximate
 causation, see, e. g., id., at 533-534, and n. 29, 536, n. 33.  It must
 be assumed that the Congress which enacted 1964(c) intended its
 words to have the same meaning that courts had already given them.
 Cf. id., at 534.  Although 1964(c)'s language can be read to require
 only factual, ``but for,'' causation, this construction is hardly com-
 pelled, and the very unlikelihood that Congress meant to allow all
 factually injured plaintiffs to recover persuades this Court that the
 Act should not get such an expansive reading.  Pp.6-9.
   (b)As used herein, ``proximate cause'' requires some direct relation
 between the injury asserted and the injurious conduct alleged.  For
 a variety of reasons, see id., at 540-544, such directness of relation-
 ship is one of the essential elements of Clayton Act causation.
 Pp.9-11.
   (c)SIPC's claim that it is entitled to recover on the ground that it
 is subrogated to the rights of the broker-dealers' customers who did
 not purchase manipulated securities fails because the conspirators'
 conduct did not proximately cause those customers' injury.  Even
 assuming, arguendo, that SIPC may stand in the shoes of such
 customers, the link is too remote between the stock manipulation
 alleged, which directly injured the broker-dealers by rendering them
 insolvent, and the nonpurchasing customers' losses, which are purely
 contingent on the broker-dealers' inability to pay customers' claims.
 The facts of this case demonstrate that the reasons supporting
 adoption of the Clayton Act direct-injury limitation, see ibid., apply
 with equal force to 1964(c) suits.  First, if the nonpurchasing
 customers were allowed to sue, the district court would first need to
 determine the extent to which their inability to collect from the
 broker-dealers was the result of the alleged conspiracy, as opposed to,
 e. g., the broker-dealers' poor business practices or their failures to
 anticipate financial market developments.  Second, assuming that an
 appropriate assessment of factual causation could be made out, the
 court would then have to find some way to apportion the possible
 respective recoveries by the broker-dealers and the customers, who
 would otherwise each be entitled to recover the full treble damages.
 Finally, the law would be shouldering these difficulties despite the
 fact that the directly injured broker-dealers could be counted on to
 bring suit for the law's vindication, as they have in fact done in the
 persons of their SIPA trustees.  Indeed, the insolvency of the victim
 directly injured adds a further concern to those already expressed in
 Associated General Contractors, since a suit by an indirectly injured
 victim could be an attempt to circumvent the relative priority its
 claim would have in the directly injured victim's liquidation proceed-
 ings.  This analysis is not deflected by the congressional admonition
 that RICO be liberally construed to effectuate its remedial purposes,
 since allowing suits by those injured only indirectly would open the
 door to massive and complex damages litigation, which would not
 only burden the courts, but also undermine the effectiveness of
 treble-damages suits.  Id., at 545.  Thus, SIPC must await the
 outcome of the trustees' suit and may share according to the priority
 SIPA gives its claim if the trustees recover from Holmes.  Pp.11-16.
   (d)SIPC's claim that it is entitled to recover under a SIPA provi-
 sion, 15 U.S.C. 78eee(d), fails because, on its face, that section
 simply qualifies SIPC as a proper party in interest in any ``matter
 arising in a liquidation proceeding'' as to which it ``shall be deemed
 to have intervened,'' and gives SIPC no independent right to sue
 Holmes for money damages.  P.16.
   (e)This Court declines to decide whether every RICO plaintiff who
 sues under 1964(c) and claims securities fraud as a predicate
 offense must have purchased or sold a security.  In light of the
 foregoing, discussion of that issue is unnecessary to resolve this case.
 Nor will leaving the question unanswered deprive the lower courts
 of much-needed guidance.  A review of those courts' conflicting cases
 shows that all could have been resolved on proximate-causation
 grounds, and that none involved litigants like those in Blue Chip
 Stamps v. Manor Drug Stores, 421 U.S. 723, who decided to forgo
 securities transactions in reliance on misrepresentations.  P.17.
908 F.2d 1461, reversed and remanded.

 Souter, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and Blackmun, Kennedy, and Thomas, JJ., joined, and in all
but Part IV of which White, Stevens, and O'Connor, JJ., joined.
O'Connor, J., filed an opinion concurring in part and concurring in the
judgment, in which White and Stevens, JJ., joined.  Scalia, J., filed
an opinion concurring in the judgment.
-------------------------------

Notice: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
--------
No. 90-727
--------
ROBERT G. HOLMES, Jr., PETITIONER v. SECURI-
TIES INVESTOR PROTECTION CORPORATION et al.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[March 24, 1992]

  Justice Souter delivered the opinion of the Court.
  Respondent Securities Investor Protection Corporation
(SIPC) alleges that petitioner Robert G. Holmes, Jr.,
conspired in a stock-manipulation scheme that disabled two
broker-dealers from meeting obligations to customers, thus
triggering SIPC's statutory duty to advance funds to
reimburse the customers.  The issue is whether SIPC can
recover from Holmes under the Racketeer Influenced and
Corrupt Organizations Act (RICO), 84 Stat. 941, as amend-
ed, 18 U. S. C. 1961-1968 (1988 ed. and Supp. I).  We
hold that it cannot.
                            I
                            A
  In 1970, Congress enacted the Securities Investor
Protection Act (SIPA), 84 Stat. 1636, as amended, 15
U. S. C. 78aaa-78lll, which authorized the formation of
SIPC, a private nonprofit corporation, 78ccc(a)(1), of which
most broker-dealers registered under 15(b) of the Securi-
ties Exchange Act of 1934, 78o(b), are required to be
``members.''  78ccc(a)(2)(A).  Whenever SIPC determines
that a member ``has failed or is in danger of failing to meet
its obligations to customers,'' and finds certain other
statutory conditions satisfied, it may ask for a ``protective
decree'' in federal district court.  78eee(a)(3).  Once a court
finds grounds for granting such a petition, 78eee(b)(1), it
must appoint a trustee charged with liquidating the
member's business, 78eee(b)(3).
  After returning all securities registered in specific
customers' names, 78fff-2(c)(2); 78fff(a)(1)(A); 78lll(3), the
trustee must pool securities not so registered together with
cash found in customers' accounts and divide this pool
ratably to satisfy customers' claims, 78fff-2(b); 78fff(a)-
(1)(B).  To the extent the pool of customer property is
inadequate, SIPC must advance up to $500,000 per custom-
er to the trustee for use in satisfying those claims.  78fff-
3(a).
                            B
  On July 24, 1981, SIPC sought a decree from the United
States District Court for the Southern District of Florida to
protect the customers of First State Securities Corporation
(FSSC), a broker-dealer and SIPC member.  Three days
later, it petitioned the United States District Court for the
Central District of California, seeking to protect the
customers of Joseph Sebag, Inc. (Sebag), also a broker-
dealer and SIPC member.  Each court issued the requested
decree and appointed a trustee, who proceeded to liquidate
the broker-dealer.
  Two years later, SIPC and the two trustees brought this
suit in the United States District Court for the Central
District of California, accusing some 75 defendants of
conspiracy in a fraudulent scheme leading to the demise of
FSSC and Sebag.  Insofar as they are relevant here, the
allegations were that, from 1964 through July 1981, the
defendants manipulated stock of six companies by making
unduly optimistic statements about their prospects and by
continually selling small numbers of shares to create the
appearance of a liquid market; that the broker-dealers
bought substantial amounts of the stock with their own
funds; that the market's perception of the fraud in July
1981 sent the stocks plummeting; that this decline caused
the broker-dealers' financial difficulties resulting in their
eventual liquidation and SIPC's advance of nearly $13
million to cover their customers' claims.  The complaint
described Holmes' participation in the scheme by alleging
that he made false statements about the prospects of one of
the six companies, Aero Systems, Inc., of which he was an
officer, director, and major shareholder; and that over an
extended period he sold small amounts of stock in one of
the other six companies, the Bunnington Corporation, to
simulate a liquid market.  The conspirators were said to
have violated 10(b) of the Securities Exchange Act of 1934,
15 U. S. C. 78j(b), SEC Rule 10b-5, 17 CFR 240.10b-5
(1991), and the mail and wire fraud statutes, 18 U. S. C.
1341, 1343 (1988 ed., Supp. I).  Finally, the complaint
concluded that their acts amounted to a ``pattern of racke-
teering activity'' within the meaning of the RICO statute,
18 U. S. C. 1962, 1961(1) and (5) (1988 ed. and Supp. I),
so as to entitle the plaintiffs to recover treble damages,
1964(c).
  After some five years of litigation over other issues, the
District Court entered summary judgment for Holmes on
the RICO claims, ruling that SIPC ``does not meet the
`purchaser-seller' requirements for standing to assert RICO
claims which are predicated upon violation of Section 10(b)
and Rule 10b-5,'' App. to Pet. for Cert. 45a, and that
neither SIPC nor the trustees had satisfied the ``proximate
cause requirement under RICO,'' id., at 39a; see 37a.
Although SIPC's claims against many other defendants
remained pending, the District Court under Fed. Rule Civ.
Proc. 54(b) entered a partial judgment for Holmes, immedi-
ately appealable.  SIPC and the trustees appealed.
  The United States Court of Appeals for the Ninth Circuit
reversed and remanded after rejecting both of the District
Court's grounds.  Securities Investor Protection Corp. v.
Vigman, 908 F. 2d 1461 (CA9 1990) (Vigman III).  The
Court of Appeals held first that, whereas a purchase or sale
of a security is necessary for entitlement to sue on the
implied right of action recognized under 10(b) and Rule
10b-5, see Blue Chip Stamps v. Manor Drug Stores, 421
U. S. 723 (1975), the cause of action expressly provided by
1964(c) of RICO imposes no such requirement limiting
SIPC's standing.  Vigman III, supra, at 1465-1467.  Second,
the appeals court held the finding of no proximate cause to
be error, the result of a mistaken focus on the causal
relation between SIPC's injury and the acts of Holmes
alone; since Holmes could be held responsible for the acts
of all his co-conspirators, the Court of Appeals explained,
the District Court should have looked to the causal relation
between SIPC's injury and the acts of all conspirators.  Id.,
at 1467-1469.
  Holmes' ensuing petition to this Court for certiorari
presented two issues, whether SIPC had a right to sue
under RICO, and whether Holmes could be held responsi-
ble for the actions of his co-conspirators.  We granted the
petition on the former issue alone, 499 U. S. ____ (1991),
and now reverse.
                           II
                            A
  RICO's provision for civil actions reads that
``[a]ny person injured in his business or property by
reason of a violation of section 1962 of this chapter may
sue therefor in any appropriate United States district
court and shall recover threefold the damages he
sustains and the cost of the suit, including a reasonable
attorney's fee.''  18 U. S. C. 1964(c).
  This language can of course be read to mean that a
plaintiff is injured ``by reason of'' a RICO violation, and
therefore may recover, simply on showing that the defen-
dant violated 1962, the plaintiff was injured, and the
defendant's violation was a ``but for'' cause of plaintiff's
injury.  Cf. Associated General Contractors of Cal., Inc. v.
Carpenters, 459 U. S. 519, 529 (1983).  This construction is
hardly compelled, however, and the very unlikelihood that
Congress meant to allow all factually injured plaintiffs to
recover persuades us that the Act should not get such an
expansive reading.  Not even SIPC seriously argues
otherwise.
  The key to the better interpretation lies in some statutory
history.  We have repeatedly observed, see Agency Holding
Corp. v. Malley-Duff & Associates, Inc., 483 U. S. 143,
150-151 (1987); Shearson/American Express Inc. v. McMa-
hon, 482 U. S. 220, 241 (1987); Sedima, S. P. R. L. v. Imrex
Co., 473 U. S. 479, 489 (1985), that Congress modeled
1964(c) on the civil-action provision of the federal antitrust
laws, 4 of the Clayton Act, which reads in relevant part
that
``any person who shall be injured in his business or
property by reason of anything forbidden in the anti-
trust laws may sue therefor . . . and shall recover
threefold the damages by him sustained, and the cost
of suit, including a reasonable attorney's fee.''  15
U. S. C. 15.
  In Associated General Contractors, supra, we discussed
how Congress enacted 4 in 1914 with language borrowed
from 7 of the Sherman Act, passed 24 years earlier.
Before 1914, lower federal courts had read 7 to incorporate
common-law principles of proximate causation, 459 U. S., at
533-534, and n.29 (citing Loeb v. Eastman Kodak Co., 183
F. 704 (CA3 1910); Ames v. American Telephone & Tele-
graph Co., 166 F. 820 (CC Mass. 1909)), and we reasoned,
as many lower federal courts had done before us, see
Associated General Contractors, supra, at 536, n.33 (citing
cases), that congressional use of the 7 language in 4
presumably carried the intention to adopt ``the judicial gloss
that avoided a simple literal interpretation,'' 459 U. S., at
534.  Thus, we held that a plaintiff's right to sue under 4
required a showing not only that the defendant's violation
was a ``but for'' cause of his injury, but was the proximate
cause as well.
  The reasoning applies just as readily to 1964(c).  We
may fairly credit the 91st Congress, which enacted RICO,
with knowing the interpretation federal courts had given
the words earlier Congresses had used first in 7 of the
Sherman Act, and later in the Clayton Act's 4.  See
Cannon v. University of Chicago, 441 U. S. 677, 696-698
(1979).  It used the same words, and we can only assume it
intended them to have the same meaning that courts had
already given them.  See, e. g., Oscar Mayer & Co. v. Evans,
441 U. S. 750, 756 (1979); Northcross v. Memphis Board of
Education, 412 U. S. 427, 428 (1973).  Proximate cause is
thus required.
                            B
  Here we use ``proximate cause'' to label generically the
judicial tools used to limit a person's responsibility for the
consequences of that person's own acts.  At bottom, the
notion of proximate cause reflects ``ideas of what justice
demands, or of what is administratively possible and
convenient.''  W. Keeton, D. Dobbs, R. Keeton, & D. Owen,
Prosser and Keeton on Law of Torts 41, p. 264 (5th ed.
1984).  Accordingly, among the many shapes this concept
took at common law, see Associated General Contractors,
supra, at 532-533, was a demand for some direct relation
between the injury asserted and the injurious conduct
alleged.  Thus, a plaintiff who complained of harm flowing
merely from the misfortunes visited upon a third person by
the defendant's acts was generally said to stand at too
remote a distance to recover.  See, e. g., 1 J. Sutherland,
Law of Damages 55-56 (1882).
  Although such directness of relationship is not the sole
requirement of Clayton Act causation, it has been one of
its central elements, Associated General Contractors, supra,
at 540, for a variety of reasons.  First, the less direct an
injury is, the more difficult it becomes to ascertain the
amount of a plaintiff's damages attributable to the viola-
tion, as distinct from other, independent, factors.  Associat-
ed General Contractors, supra, at 542-543.  Second, quite
apart from problems of proving factual causation, recogniz-
ing claims of the indirectly injured would force courts to
adopt complicated rules apportioning damages among
plaintiffs removed at different levels of injury from the
violative acts, to obviate the risk of multiple recoveries.  459
U. S., at 543-544; McCready, supra, at 473-475; Hawaii v.
Standard Oil Co. of Calif., 405 U. S. 251, 264 (1972).  And,
finally, the need to grapple with these problems is simply
unjustified by the general interest in deterring injurious
conduct, since directly injured victims can generally be
counted on to vindicate the law as private attorneys gen-
eral, without any of the problems attendant upon suits by
plaintiffs injured more remotely.  Associated General Con-
tractors, supra, at 541-542.
  We will point out in Part III-A below that the facts of the
instant case show how these reasons apply with equal force
to suits under 1964(c).

                           III
  As we understand SIPC's argument, it claims entitlement
to recover, first, because it is subrogated to the rights of
those customers of the broker-dealers who did not purchase
manipulated securities, and, second, because a SIPA
provision gives it an independent right to sue.  The first
claim fails because the conspirators' conduct did not
proximately cause the nonpurchasing customers' injury, the
second because the provision relied on gives SIPC no right
to sue for damages.
                            A
  As a threshold matter, SIPC's theory of subrogation is
fraught with unanswered questions.  In suing Holmes,
SIPC does not rest its claimed subrogation to the rights of
the broker-dealers' customers on any provision of SIPA.
See Brief for Respondent 38, and n.181.  SIPC assumes that
SIPA provides for subrogation to the customers' claims
against the failed broker-dealers, see 15 U. S. C. 78fff-
3(a), 78fff-4(c); see also 78fff-2(c)(1)(C); see generally
Mishkin v. Peat, Marwick, Mitchell & Co., 744 F. Supp. 531,
556-557 (SDNY 1990), but not againsd parties like
Holmes.  As against him, SIPC relies rather on ``common
law rights of subrogation'' for what it describes as ``its
money paid to customers for customer claims against third
parties.''  Brief for Respondent 38 (footnote omitted).  At
oral argument in this Court, SIPC narrowed its subrogation
argument to cover only the rights of customers who never
purchased manipulated securities.  Tr. of Oral Arg. 29.
But SIPC stops there, leaving us to guess at the nature of
the ``common law rights of subrogation'' that it claims, and
failing to tell us whether they derive from federal or state
common law, or, if the latter, from common law of which
State.  Nor does SIPC explain why it declines to assert
the rights of customers who bought manipulated securi-
ties.
  It is not these questions, however, that stymie SIPC's
subrogation claim, for even assuming, arguendo, that it may
stand in the shoes of nonpurchasing customers, the link is
too remote between the stock manipulation alleged and the
customers' harm, being purely contingent on the harm
suffered by the broker-dealers.  That is, the conspirators
have allegedly injured these customers only insofar as the
stock manipulation first injured the broker-dealers and left
them without the wherewithal to pay customers' claims.
Although the customers' claims are senior (in recourse to
``customer property'') to those of the broker-dealers' general
creditors, see 78fff-2(c)(1), the causes of their respective
injuries are the same: The broker-dealers simply cannot pay
their bills, and only that intervening insolvency connects
the conspirators' acts to the losses suffered by the nonpur-
chasing customers and general creditors.
  As we said, however, in Associated General Contractors,
quoting Justice Holmes, ```The general tendency of the law,
in regard to damages at least, is not to go beyond the first
step.'''  459 U. S., at 534 (quoting Southern Pacific Co. v.
Darnell-Taenzer Lumber Co., 245 U. S. 531, 533 (1918)),
and the reasons that supported conforming Clayton Act
causation to the general tendency apply just as readily to
the present facts, underscoring the obvious congressional
adoption of the Clayton Act direct-injury limitation among
the requirements of 1964(c).  If the nonpurchasing
customers were allowed to sue, the district court would first
need to determine the extent to which their inability to
collect from the broker-dealers was the result of the alleged
conspiracy to manipulate, as opposed to, say, the broker-
dealers' poor business practices or their failures to antici-
pate developments in the financial markets.  Assuming that
an appropriate assessment of factual causation could be
made out, the district court would then have to find some
way to apportion the possible respective recoveries by the
broker-dealers and the customers, who would otherwise
each be entitled to recover the full treble damages.  Finally,
the law would be shouldering these difficulties despite the
fact that those directly injured, the broker-dealers, could be
counted on to bring suit for the law's vindication.  As noted
above, the broker-dealers have in fact sued in this case, in
the persons of their SIPA trustees appointed on account of
their insolvency.  Indeed, the insolvency of the victim
directly injured adds a further concern to those already
expressed, since a suit by an indirectly injured victim could
be an attempt to circumvent the relative priority its claim
would have in the directly injured victim's liquidation
proceedings.  See Mid-State Fertilizer Co. v. Exchange
National Bank of Chicago, 877 F. 2d 1333, 1336 (CA7
1989).
  As against the force of these considerations of history and
policy, SIPC's reliance on the congressional admonition that
RICO be ``liberally construed to effectuate its remedial pur-
poses,'' 904(a), 84 Stat. 947, does not deflect our analysis.
There is, for that matter, nothing illiberal in our construc-
tion: We hold not that RICO cannot serve to right the con-
spirators' wrongs, but merely that the nonpurchasing cus-
tomers, or SIPC in their stead, are not proper plaintiffs.
Indeed, we fear that RICO's remedial purposes would more
probably be hobbled than helped by SIPC's version of lib-
eral construction: Allowing suits by those injured only in-
directly would open the door to ``massive and complex dam-
ages litigation[, which would] not only burde[n] the courts,
but also undermin[e] the effectiveness of treble-damages
suits.''  Associated General Contractors, 459 U. S., at 545.
  In sum, subrogation to the rights of the manipulation
conspiracy's secondary victims does, and should, run afoul
of proximate-causation standards, and SIPC must wait on
the outcome of the trustees' suit.  If they recover from
Holmes, SIPC may share according to the priority SIPA
gives its claim.  See 15 U. S. C. 78fff-2(c).

                            B
  SIPC also claims a statutory entitlement to pursue
Holmes for funds advanced to the trustees for administering
the liquidation proceedings.  See Tr. of Oral Arg. 30.  Its
theory here apparently is not one of subrogation, to which
the statute makes no reference in connection with SIPC's
obligation to make such advances.  See 15 U. S. C. 78fff-
3(b)(2).  SIPC relies instead, see Brief for Respondent 37,
and n.180, on this SIPA provision:
      ``SIPC participation - SIPC shall be deemed to be a
party in interest as to all matters arising in a liquida-
tion proceeding, with the right to be heard on all such
matters, and shall be deemed to have intervened with
respect to all such matters with the same force and
effect as if a petition for such purpose had been allowed
by the court.''  15 U. S. C. 78eee(d).
  The language is inapposite to the issue here, however.
On its face, it simply qualifies SIPC as a proper party in
interest in any ``matter arising in a liquidation proceeding''
as to which it ``shall be deemed to have intervened.''  By
extending a right to be heard in a ``matter'' pending
between other parties, however, the statute says nothing
about the conditions necessary for SIPC's recovery as a
plaintiff.  How the provision could be read, either alone or
with 1964(c), to give SIPC a right to sue Holmes for money
damages simply eludes us.

                           IV
  Petitioner urges us to go further and decide whether
every RICO plaintiff who sues under 1964(c) and claims
securities fraud as a predicate offense must have purchased
or sold a security, an issue on which the Circuits appear
divided.  We decline to do so.  Given what we have said
in Parts II and III, our discussion of the issue would be
unnecessary to the resolution of this case.  Nor do we think
that leaving this question unanswered will deprive the
lower courts of much-needed guidance.  A review of the
conflicting cases shows that all could have been resolved on
proximate-causation grounds, and that none involved liti-
gants like those in Blue Chip Stamps v. Manor Drug Stores,
421 U. S. 723 (1975), persons who had decided to forgo
securities transactions in reliance on misrepresentations.
Thus, we think it inopportune to resolve the issue today.

                            V
  We hold that, because the alleged conspiracy to manipu-
late did not proximately cause the injury claimed, SIPC's
allegations and the record before us fail to make out a right
to sue petitioner under 1964(c).  We reverse the judgment
of the Court of Appeals and remand the case for further
proceedings consistent with this opinion.

                                      It is so ordered.
-------------------------------


SUPREME COURT OF THE UNITED STATES
--------
No. 90-727
--------
 ROBERT G. HOLMES, Jr., PETITIONER v. SECURI-
TIES INVESTOR PROTECTION CORPORATION et al.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[March 24, 1992]

  Justice O'Connor, with whom Justice White and
Justice Stevens join, concurring in part and concurring in
the judgment.
  I agree with the Court that the civil action provisions of
the Racketeer Influenced and Corrupt Organizations Act
(RICO), 84 Stat. 941, as amended, 18 U. S. C. 1961-1968
(1988 ed. and Supp. I), have a proximate cause element,
and I can even be persuaded that the proximate-cause issue
is ``fairly included'' in the question on which we granted
certiorari.  Ante, at 7, n. 12.  In my view, however, before
deciding whether the Securities Investor Protection Corpo-
ration (SIPC) was proximately injured by petitioner's
alleged activities, we should first consider the standing
question that was decided below, and briefed and argued
here, and which was the only clearly articulated question
on which we granted certiorari.  In resolving that question,
I would hold that a plaintiff need not be a purchaser or a
seller to assert RICO claims predicated on violations of
fraud in the sale of securities.
  Section 10(b) of the Securities Exchange Act of 1934
(1934 Act) makes it unlawful for any person to use, ``in
connection with the purchase or sale of any security,'' any
``manipulative or deceptive device or contrivance'' in
contravention of rules or regulations that the Securities and
Exchange Commission (SEC) may prescribe.  15 U. S. C.
78j(b).  Pursuant to its authority under 10(b), the SEC
has adopted Rule 10b-5, which prohibits manipulative or
deceptive acts ``in connection with the purchase or sale of
any security.''  17 CFR 240.10b-5 (1991).  In 1971, we
ratified without discussion the ``established'' view that
10(b) and Rule 10b-5 created an implied right of action.
Superintendent of Insurance v. Bankers Life & Cas. Co., 404
U. S. 6, 13, n. 9.  Four years later, in Blue Chip Stamps v.
Manor Drug Stores, 421 U. S. 723 (1975), we confirmed the
federal courts' ``longstanding acceptance'' of the rule that
a plaintiff must have actually purchased or sold the
securities at issue in order to bring a Rule 10b-5 private
damages action.  Id., at 733.
  In this case, the District Court held that SIPC, which was
neither a purchaser nor a seller of the allegedly manipu-
lated securities, lacked standing to assert RICO claims
predicated on alleged violations of 10(b) and Rule 10b-5.
App. to Pet. for Cert. 45a.  The Court of Appeals reversed
and held that Blue Chip Stamps' purchaser/seller limitation
does not apply to suits brought under RICO.  Securities
Investment Protection Corp. v. Vigman, 908 F. 2d 1461 (CA9
1990).  An examination of the text of RICO, and a compari-
son with the situation the Court confronted in Blue Chip
Stamps, persuades me that the Court of Appeals' determi-
nation was correct.  Because the Court's decision today
leaves intact a division among the Circuits on whether Blue
Chip Stamps' standing requirement applies in RICO suits,
I would affirm this portion of the decision below, even
though we go on to hold that the alleged RICO violation did
not proximately cause SIPC's injuries.
  Our obvious starting point is the text of the statute under
which SIPC sued.  RICO makes it unlawful for any person
who has engaged in a ``pattern of racketeering activity'' to
invest, maintain an interest, or participate in an enterprise
that is engaged in interstate or foreign commerce.  18
U. S. C. 1962.  ``[R]acketeering activity'' is defined to
include a number of state and federal offenses, including
any act indictable under 18 U. S. C. 1341 (mail fraud) or
1343 (wire fraud), and ``any offense involving . . . fraud in
the sale of securities . . . punishable under any law of the
United States.''  1961(1).  RICO authorizes ``[a]ny person
injured in his business or property by reason of a violation
of section 1962'' to sue for treble damages in federal court.
18 U.S.C. 1964(c).
  RICO's civil suit provision, considered on its face, has no
purchaser/seller standing requirement.  The statute sweeps
broadly, authorizing ``[a]ny person'' who is injured by reason
of a RICO violation to sue.  ``[P]erson'' is defined to include
``any individual or entity capable of holding a legal or
beneficial interest in property.''  1961(3) (emphasis added).
``Insofar as `any' encompasses `all','' Mobil Oil Exploration
& Producing Southeast, Inc. v. United Distribution Cos.,
498 U. S. ___, ___ (1991) (slip op., at 10), the words ``any
person'' cannot reasonably be read to mean only purchasers
and sellers of securities.  As we have explained in rejecting
previous efforts to narrow the scope of civil RICO: ``If the
defendant engages in a pattern of racketeering activity in
a manner forbidden by [1962's] provisions, and the
racketeering activities injure the plaintiff in his business or
property, the plaintiff has a claim under 1964(c).  There is
no room in the statutory language for an additional . . .
requirement.''  Sedima, S.P.R.L. v. Imrex Co., 473 U. S. 479,
495 (1985).
  Of course, a RICO plaintiff ``on standing if, and can
only recover to the extent that, he has been injured in his
business or property by [reason of] the conduct constituting
the violation.''  Id., at 496.  We have already remarked that
the requirement of injury in one's ``business or property''
limits the availability of RICO's civil remedies to those who
have suffered injury-in-fact.  Id., at 497 (citing Haroco, Inc.
v. American National Bank & Trust Co. of Chicago, 747
F. 2d 384, 398 (CA7 1984)).  Today, the Court sensibly
holds that the statutory words ``by reason of'' operate, as
they do in the antitrust laws, to confine RICO's civil
remedies to those whom the defendant has truly injured in
some meaningful sense.  Requiring a proximate relationship
between the defendant's actions and the plaintiff's harm,
however, cannot itself preclude a nonpurchaser or nonseller
of securities, alleging predicate acts of fraud in the sale of
securities, from bringing suit under 1964(c).  Although the
words ``injury in [one's] business or property'' and ``by
reason of'' are words of limitation, they do not categorically
exclude nonpurchasers and nonsellers of securities from the
universe of RICO plaintiffs.
  Petitioner argues that the civil suit provisions of 1964(c)
are not as sweeping as they appear because 1964(c)
incorporates the standing requirements of the predicate acts
alleged.  But 1964(c) focuses on the ``injur[y]'' of any
``person,'' not the legal right to sue of any proper plaintiff
for a predicate act.  If standing were to be determined by
reference to the predicate offenses, a private RICO plaintiff
could not allege as predicates many of the acts that consti-
tute the definition of racketeering activity.  The great
majority of acts listed in 1961(1) are criminal offenses for
which only a State or the Federal Government is the proper
party to bring suit.  In light of 1964(c)'s provision that
``any person'' injured by reason of a RICO violation may
sue, I would not accept that this same section envisions an
overlay of standing requirements from the predicate acts,
with the result that many RICO suits could be brought only
by government entities.
  Nor can I accept the contention that, even if 1964(c)
does not normally incorporate the standing requirements of
the predicate acts, an exception should be made for ``fraud
in the sale of securities'' simply because it is well estab-
lished that a plaintiff in a civil action under 10(b) and
Rule 10b-5 must be either a purchaser or seller of securi-
ties.  A careful reading of 1961(1) reveals the flaw in this
argument.  The relevant predicate offense is ``any offense
involving . . . fraud in the sale of securities . . . punishable
under any law of the United States.''  The embracing words
``offense . . . punishable under any law of the United States''
plainly signify the elements necessary to bring a criminal
prosecution.  See Trane Co. v. O'Connor Securities, 718
F. 2d 26, 29 (CA2 1983); Dan River, Inc. v. Icahn, 701 F. 2d
278, 291 (CA4 1983).  To the extent that RICO's reference
to an ``offense involving fraud in the sale of securities''
encompasses conduct that violates 10(b), see infra, at 6-7,
the relevant predicate is defined not by 10(b) itself, but
rather by 32(a) of the 1934 Act, 15 U. S. C. 78ff(a), which
authorizes criminal sanctions against any person who
willfully violates the Act or rules promulgated thereunder.
As we have previously made clear, the purchaser/seller
standing requirement for private civil actions under 10(b)
and Rule 10b-5 is of no import in criminal prosecutions for
willful violations of those provisions.  United States v.
Naftalin, 441 U. S. 768, 774, n. 6 (1979); SEC v. National
Securities, Inc. 393 U. S. 453, 467, n. 9 (1969).  Thus, even
if Congress intended RICO's civil suit provision to subsume
established civil standing requirements for predicate
offenses, that situation is not presented here.
  Although the civil suit provisions of 1964(c) lack a
purchaser/seller requirement, it is still possible that one
lurks in 1961(1)'s catalog of predicate acts; i.e., it is
possible that 1961(1) of its own force limits RICO standing
to the actual parties to a sale.  As noted above, the statute
defines ``racketeering activity'' to include ``any offense
involving . . . fraud in the sale of securities . . . punishable
under any law of the United States.''  Unfortunately, the
term ``fraud in the sale of securities'' is not further defined.
``[A]ny offense . . . punishable under any law of the United
States'' presumably means that Congress intended to refer
to the federal securities laws and not common-law tort
actions for fraud.  Unlike most of the predicate offenses
listed in 1961(1), however, there is no cross-reference to
any specific sections of the United States Code.  Nor is
resort to the legislative history helpful in clarifying what
kinds of securities violations Congress contemplated would
be covered.  See generally Bridges, Private RICO Litigation
Based Upon ``Fraud in the Sale of Securities,'' 18 Ga. L.
Rev. 43, 58-59 (1983) (discussing paucity of legislative
history); Note, RICO and Securities Fraud: A Workable
Limitation, 83 Colum. L. Rev. 1513, 1536-1539 (1983)
(reviewing testimony before Senate Judiciary Committee).
  Which violations of the federal securities laws, if any,
constitute a ``fraud in the sale of securities'' within the
meaning of 1961(1) is a question that has generated much
ink and little agreement among courts or commentators,
and one which we need not definitively resolve here.  The
statute unmistakably requires that there be fraud, suffi-
ciently willful to constitute a criminal violation, and that
there be a sale of securities.  At the same time, however, I
am persuaded that Congress' use of the word ``sale'' in
defining the predicate offense does not necessarily dictate
that a RICO plaintiff have been a party to an executed sale.
  Section 1961(1)'s list of racketeering offenses provides the
RICO predicates for both criminal prosecutions and civil
actions.  Obviously there is no requirement that the
Government be party to a sale before it can bring a RICO
prosecution predicated on ``fraud in the sale of securities.''
Accordingly, any argument that the offense itself embodies
a standing requirement must apply only to private actions.
That distinction is not tenable, however.  By including a
private right of action in RICO, Congress intended to bring
``the pressure of `private attorneys general' on a serious
national problem for which public prosecutorial resources
[were] deemed inadequate.''  Agency Holding Corp. v.
Malley-Duff & Assocs., 483 U. S. 143, 151 (1987).  Although
not everyone can qualify as an appropriate ``private attor-
ney general,'' the prerequisites to the role are articulated,
not in the definition of the predicate act, but in the civil
action provisions of 1964(c)-a plaintiff must allege
``injur[y] in his business or property by reason of'' a RICO
violation.
  Construing RICO's reference to ``fraud in the sale of
securities'' to limit standing to purchasers and sellers would
be in tension with our reasoning in Blue Chip Stamps.  In
that case, the Court admitted that it was not ``able to divine
from the language of 10(b) the express `intent of Congress'
as to the contours of a private cause of action under Rule
10b-5.''  421 U. S., at 737.  The purchaser/seller standing
limitation in Rule 10b-5 damages actions thus does not
stem from a construction of the phrase ``in connection with
the purchase or sale of any security.''  Rather, it rests on
the relationship between 10(b) and other provisions of the
securities laws, id., at 733-736, and the practical difficulties
in granting standing in the absence of an executed transac-
tion, id., at 737-749, neither of which are relevant in the
RICO context.
  Arguably, even if 10(b)'s reference to fraud ``in connec-
tion with'' the sale of a security is insufficient to limit the
plaintiff class to purchasers and sellers, 1961(1)'s refer-
ence to fraud ``in'' the sale of a security performs just such
a narrowing function.  But we have previously had occasion
to express reservations on the validity of that distinction.
In United States v. Naftalin, 441 U. S. 768 (1979), we
reinstated the conviction of a professional investor who
engaged in fraudulent ``short selling'' by placing orders with
brokers to sell shares of stock which he falsely represented
that he owned.  This Court agreed with the District Court
that Naftalin was guilty of fraud ``in'' the ``offer'' or ``sale'' of
securities in violation of 17(a)(1) of the Securities Act of
1933, 15 U. S. C. 77q(a)(1), even though the fraud was
perpetrated on the brokers, not their purchasing clients.
The Court noted:
   ``[Naftalin] contends that the requirement that the
   fraud be `in' the offer or sale connotes a narrower range
   of activities than does the phrase `in connection with,'
   which is found in 10(b) . . . .  First, we are not neces-
   sarily persuaded that `in' is narrower than `in connec-
   tion with.'  Both Congress, see H.R. Rep. No. 85, 73d
   Cong., 1st Sess., 6 (1933), and this Court, see Superin-
   tendent of Insurance v. Bankers Life & Cas. Co., 404
   U. S. 6, 10 (1971), have on occasion used the terms
   interchangeably.  But even if `in' were meant to connote
   a narrower group of transactions than `in connection
   with,' there is nothing to indicate that `in' is narrower
   in the sense insisted upon by Naftalin.''  441 U. S., at
   773, n. 4.
  So also in today's case.  To the extent that there is a
meaningful difference between Congress' choice of ``in'' as
opposed to ``in connection with,'' I do not view it as limiting
the class of RICO plaintiffs to those who were parties to a
sale.  Rather, consistent with today's decision, I view it as
confining the class of defendants to those proximately
responsible for the plaintiff's injury and excluding those
only tangentially ``connect[ed] with'' it.
  In Blue Chip Stamps, we adopted the purchaser/seller
standing limitation in 10(b) cases as a prudential means
of avoiding the problems of proof when no security was
traded and the nuisance potential of vexatious litigation.
421 U. S., at 738-739.  In that case, however, we were
confronted with limiting access to a private cause of action
that was judicially implied.  We expressly acknowledged
that ``if Congress had legislated the elements of a private
cause of action for damages, the duty of the Judicial Branch
would be to administer the law which Congress enacted; the
Judiciary may not circumscribe a right which Congress has
conferred because of any disagreement it might have with
Congress about the wisdom of creating so expansive a
liability.''  Id., at 748.  To be sure, the problems of expan-
sive standing identified in Blue Chip Stamps are exacerbat-
ed in RICO.  In addition to the threat of treble damages, a
defendant faces the stigma of being labeled a ``racketeer.''
Nonetheless, Congress has legislated the elements of a
private cause of action under RICO.  Specifically, Congress
has authorized ``[a]ny person injured in his business or
property by reason of'' a RICO violation to bring suit under
section 1964(c).  Despite the very real specter of vexatious
litigation based on speculative damages, it is within
Congress' power to create a private right of action for
plaintiffs who have neither bought nor sold securities.  For
the reasons stated above, I think Congress has done so.
``That being the case, the courts are without authority to
restrict the application of the statute.''  United States v.
Turkette, 452 U. S. 576, 587 (1981).
  In sum, we granted certiorari to resolve a split among the
Circuits as to whether a nonpurchaser or nonseller of
securities could assert RICO claims predicated on violations
of 10(b) and Rule 10b-5.  See cases cited n. 1, supra.  I
recognize that, like the case below, some of those decisions
might have been more appropriately cast in terms of
proximate causation.  That we have now more clearly
articulated the causation element of a civil RICO action
does not change the fact that the governing precedent in
several Circuits is in disagreement as to Blue Chip Stamps'
applicability in the RICO context.  Because that issue was
decided below and fully addressed here, we should resolve
it today.  I would sustain the Court of Appeals' determina-
tion that RICO plaintiffs alleging predicate acts of fraud in
the sale of securities need not be actual purchasers or
sellers of the securities at issue.  Accordingly, I join all of
the Court's opinion except Part IV.
-------------------------------


SUPREME COURT OF THE UNITED STATES
--------
No. 90-727
--------
ROBERT G. HOLMES, Jr., PETITIONER v. SECURI-
TIES INVESTOR PROTECTION CORPORATION et al.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[March 24, 1992]

  Justice Scalia, concurring in the judgment.
  I agree with Justice O'Connor that in deciding this case
we ought to reach rather than avoid the question on which
we granted certiorari.  I also agree with her on the answer
to that question: that the purchaser-seller rule does not
apply in civil RICO cases alleging as predicate acts viola-
tions of Securities and Exchange Commission Rule 10b-5,
17 CFR 240.10b-5 (1991).  My reasons for that conclusion,
however, are somewhat different from hers.
  The ultimate question here is statutory standing: whether
the so-called nexus (mandatory legalese for ``connection'')
between the harm of which this plaintiff complains and the
defendant's so-called predicate acts is of the sort that will
support an action under civil RICO.  See Sedima S. P. R. L.
v. Imrex Co., Inc., 473 U.S. 479, 497 (1985).  One of the
usual elements of statutory standing is proximate causality.
It is required in RICO not so much because RICO has
language similar to that of the Clayton Act, which in turn
has language similar to that of the Sherman Act, which, by
the time the Clayton Act had been passed, had been
interpreted to include a proximate-cause requirement; but
rather, I think, because it has always been the practice of
common-law courts (and probably of all courts, under all
legal systems) to require as a condition of recovery, unless
the legislature specifically prescribes otherwise, that the
injury have been proximately caused by the offending
conduct.  Life is too short to pursue every human act to its
most remote consequences; ``for want of a nail, a kingdom
was lost'' is a commentary on fate, not the statement of a
major cause of action against a blacksmith.  See Associated
General Contractors of Cal., Inc. v. Carpenters, 459 U.S.
519, 536 (1983).
  Yet another element of statutory standing is compliance
with what I shall call the ``zone of interests'' test, which
seeks to determine whether, apart from the directness of
the injury, the plaintiff is within the class of persons sought
to be benefitted by the provision at issue.  Judicial infer-
ence of a zone-of-interests requirement, like judicial
inference of a proximate-cause requirement, is a back-
ground practice against which Congress legislates.  See
Block v. Community Nutrition Institute, 467 U.S. 340,
345-348 (1984).  Sometimes considerable limitations upon
the zone of interests are set forth explicitly in the statute
itself-but rarely, if ever, are those limitations so complete
that they are deemed to preclude the judicial inference of
others.  If, for example, a securities fraud statute specifical-
ly conferred a cause of action upon ``all purchasers, sellers,
or owners of stock injured by securities fraud,'' I doubt
whether a stockholder who suffered a heart attack upon
reading a false earnings report could recover his medical
expenses.  So also here.  The phrase ``any person injured in
his business or property by reason of'' the unlawful activi-
ties makes clear that the zone of interests does not extend
beyond those injured in that respect-but does not necessar-
ily mean that it includes all those injured in that respect.
Just as the phrase does not exclude normal judicial infer-
ence of proximate cause, so also it does not exclude normal
judicial inference of zone of interests.
  It seems to me obvious that the proximate-cause test and
the zone-of-interests test that will be applied to the various
causes of action created by 18 U. S. C. 1964 are not
uniform, but vary according to the nature of the criminal
offenses upon which those causes of action are based.  The
degree of proximate causality required to recover damages
caused by predicate acts of sports bribery, for example, see
18 U. S. C. 224, will be quite different from the degree
required for damages caused by predicate acts of transport-
ing stolen property, see 18 U. S. C. 2314-2315.  And so
also with the applicable zone-of-interests test: It will vary
with the underlying violation.  (Where the predicate acts
consist of different criminal offenses, presumably the
plaintiff would have to be within the degree of proximate
causality and within the zone of interests as to all of them.)
  It also seems to me obvious that unless some reason for
making a distinction exists, the background zone-of-inter-
ests test applied to one cause of action for harm caused by
violation of a particular criminal provision should be the
same as the test applied to another cause of action for harm
caused by violation of the same provision.  It is principally
in this respect that I differ from Justice O'Connor's
analysis, ante, at 4 (opinion concurring in part and concur-
ring in judgment).  If, for example, one statute gives
persons injured by a particular criminal violation a cause of
action for damages, and another statute gives them a cause
of action for equitable relief, the persons coming within the
zone of interests of those two statutes would be identical.
Hence the relevance to this case of our decision in Blue
Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975).
The predicate acts of securities fraud alleged here are
violations of Rule 10b-5; and we held in Blue Chip Stamps
that the zone of interests for civil damages attributable to
violation of that provision does not include persons who are
not purchasers or sellers.  As I have described above, just
as RICO's statutory phrase ``injured in his business or
property by reason of'' does not extend the rule of proximate
causation otherwise applied to congressionally created
causes of action, so also it should not extend the otherwise
applicable rule of zone of interests.
  What prevents that proposition from being determinative
here, however, is the fact that Blue Chip Stamps did not
involve application of the background zone-of-interests rule
to a congressionally created Rule 10b-5 action, but rather
specification of the contours of a Rule 10b-5 action ``im-
plied'' (i.e., created) by the Court itself-a practice we have
since happily abandoned, see, e.g., Touche Ross & Co. v.
Redington, 442 U.S. 560, 568-571, 575-576 (1979).  The
policies that we identified in Blue Chip Stamps, supra, as
supporting the purchaser-seller limitation (namely, the
difficulty of assessing the truth of others' claims, see id., at
743-747, and the high threat of ``strike'' or nuisance suits
in securities litigation, see id., at 740-741) are perhaps
among the factors properly taken into account in determin-
ing the zone of interests covered by a statute, but they are
surely not alone enough to restrict standing to purchasers
or sellers under a text that contains no hint of such a
limitation.  I think, in other words, that the limitation we
approved in Blue Chip Stamps was essentially a legislative
judgment rather than an interpretive one.  Cf. Franklin v.
Gwinnett County Public Schools, 503 U.S. ___, slip op., at
2 (1992) (Scalia, J., concurring in judgment).  It goes
beyond the customary leeway that the zone-of-interests test
leaves to courts in the construction of statutory texts.
  In my view, therefore, the Court of Appeals correctly
rejected the assertion that SIPC had no standing because
it was not a purchaser or seller of the securities in question.
A proximate-cause requirement also applied, however, and
I agree with the Court that that was not met.  For these
reasons, I concur in the judgment.
-------------------------------
