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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-
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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 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 against third 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.