US SUPREME COURT DECISIONS

Petitioner Securities Investor Protection Corp. (SIPC) was established by Congress under the Securities Investor Protection Act of 1970 (SIPA) as a nonprofit membership corporation, to provide, inter alia, financial relief to the customers of failing broker-dealers with whom the customers had left cash or securities on deposit. The SIPA creates procedures for the orderly liquidation of financially troubled member firms under which the SIPC is required, by assessing members, to maintain a fund for customer protection. The SIPC may file an application with a court for a decree initiating liquidation proceedings if it determines that a member has failed or is in danger of failing to meet its obligations to customers, and that any one of five specified conditions indicating financial difficulty exist, and the filing of the application vests the court with exclusive jurisdiction over the member and its property. If the court finds the existence of a specified condition, it must grant the application, issue the decree, and appoint the SIPC's designee as trustee to liquidate the business, and the SIPC is obligated, if necessary, to advance funds to meet certain customer claims. The Securities and Exchange Commission (SEC) is given "plenary authority" to supervise the SIPC, and is specifically authorized to apply to a district court for an order requiring the SIPC to discharge its statutory obligations. This action was brought by respondent receiver appointed to wind up the affairs of Guaranty Bond, an insolvent registered broker-dealer, to compel the SIPC to exercise its statutory authority for the benefit of Guaranty Bond's customers. The District Court denied relief. The Court of Appeals reversed.

Held: Customers of failing broker-dealers have no implied right of action under the SIPA to compel the SIPC to act for their benefit, the SEC's statutory authority to compel the SIPC to discharge its obligations being the exclusive means by which the SIPC can be forced to act. Pp. 418-425.

(a) The express statutory provision for one form of proceeding ordinarily implies that no other enforcement means was intended chanrobles.com-red

Page 421 U. S. 413

by the legislature, and here the SIPA's legislative history was entirely consonant with the implication of the statutory language that no private right of action was intended. Cf. Passenger Corp. v. Passengers Assn., 414 U. S. 453. Pp. 421 U. S. 418-420.

(b) The overall structure and purpose of the SIPC scheme are incompatible with an implied private right of action, which might well precipitate liquidations that the SIPC, which treat that approach as a last resort, might be able to avoid. Pp. 421 U. S. 420-423.

(c) The SIPA contains no standards of conduct that a private action could implement. J. I. Case Co. v. Borak, 377 U. S. 426; Allen v. State Board of Elections, 393 U. S. 544, distinguished. Pp. 421 U. S. 423-425.

496 F.2d 145, reversed and remanded.

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, STEWART, WHITE:, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. DOUGLAS, J., dissented.