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SUPREME COURT OF THE UNITED STATES
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No. 90-727
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 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 ``only has 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.