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SUPREME COURT OF THE UNITED STATES
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No. 92-854
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CENTRAL BANK OF DENVER, N. A., PETITIONER
v. FIRST INTERSTATE BANK OF DENVER, N. A.
and JACK K. NABER
on writ of certiorari to the united states court
of appeals for the tenth circuit
[April 19, 1994]

  Justice Stevens, with whom Justice Blackmun,
Justice Souter, and Justice Ginsburg join, dissenting.
  The main themes of the Court's opinion are that the
text of 10(b) of the Securities Exchange Act of 1934, 15
U. S. C. 78j(b), does not expressly mention aiding and
abetting liability, and that Congress knows how to
legislate.  Both propositions are unexceptionable, but
neither is reason to eliminate the private right of action
against aiders and abettors of violations of 10(b) and
the Securities and Exchange Commission's Rule 10b-5.
Because the majority gives short shrift to a long history
of aider and abettor liability under 10(b) and Rule
10b-5, and because its rationale imperils other well
established forms of secondary liability not expressly ad-
dressed in the securities laws, I respectfully dissent.
  In hundreds of judicial and administrative proceedings
in every circuit in the federal system, the courts and the
SEC have concluded that aiders and abettors are subject
to liability under 10(b) and Rule 10b-5.  See 5B A.
Jacobs, Litigation and Practice Under Rule 10b-5
40.02 (rev. ed. 1993) (citing cases).  While we have
reserved decision on the legitimacy of the theory in two
cases that did not present it, all 11 Courts of Appeals to
have considered the question have recognized a private
cause of action against aiders and abettors under 10(b)
and Rule 10b-5.  The early aiding and abetting deci-
sions relied upon principles borrowed from tort law; in
those cases, judges closer to the times and climate of
the 73d Congress than we concluded that holding aiders
and abettors liable was consonant with the 1934 Act's
purpose to strengthen the antifraud remedies of the
common law.  One described the aiding and abetting
theory, grounded in -general principles of tort law,- as
a -logical and natural complement- to the private 10(b)
action that furthered the Exchange Act's purpose of
-creation and maintenance of a post-issuance securities
market that is free from fraudulent practices.-  Brennan
v. Midwestern United Life Ins. Co., 259 F. Supp. 673,
680 (ND Ind. 1966) (borrowing formulation from the Re-
statement of Torts 876(b) (1939)), later opinion, 286 F.
Supp. 702 (1968), aff'd, 417 F. 2d 147 (CA7 1969), cert.
denied, 397 U. S. 989 (1970).  See also Pettit v. Ameri-
can Stock Exchange, 217 F. Supp. 21, 28 (SDNY 1963).
 The Courts of Appeals have usually applied a familiar
three-part test for aider and abettor liability, patterned
on the Restatement of Torts formulation, that requires
(i) the existence of a primary violation of 10(b) or Rule
10b-5, (ii) the defendant's knowledge of (or recklessness
as to) that primary violation, and (iii) -substantial as-
sistance- of the violation by the defendant.  See, e.g.,
Cleary v. Perfectune, Inc., 700 F. 2d 774, 776-777 (CA1
1983); IIT, An Int'l Investment Trust v. Cornfeld, 619 F.
2d 909, 922 (CA2 1980).  If indeed there has been
-continuing confusion- concerning the private right of
action against aiders and abettors, that confusion has
not concerned its basic structure, still less its -exist-
ence.-  See ante, at 5.  Indeed, in this case, petitioner
assumed the existence of a right of action against aiders
and abettors, and sought review only of the subsidiary
questions whether an indenture trustee could be found
liable as an aider and abettor absent a breach of an
indenture agreement or other duty under state law, and
whether it could be liable as an aider and abettor based
only on a showing of recklessness.  These questions, it
is true, have engendered genuine disagreement in the
Courts of Appeals.  But instead of simply addressing
the questions presented by the parties, on which the
law really was unsettled, the Court sua sponte directed
the parties to address a question on which even the
petitioner justifiably thought the law was settled, and
reaches out to overturn a most considerable body of
precedent.
 Many of the observations in the majority's opinion
would be persuasive if we were considering whether to
recognize a private right of action based upon a securi-
ties statute enacted recently.  Our approach to implied
causes of action, as to other matters of statutory con-
struction, has changed markedly since the Exchange
Act's passage in 1934.  At that time, and indeed until
quite recently, courts regularly assumed, in accord with
the traditional common law presumption, that a statute
enacted for the benefit of a particular class conferred on
members of that class the right to sue violators of that
statute.  Moreover, shortly before the Exchange Act
was passed, this Court instructed that such -remedial-
legislation should receive -a broader and more liberal
interpretation than that to be drawn from mere dictio-
nary definitions of the words employed by Congress.-
Piedmont & Northern R. Co. v. ICC, 286 U. S. 299, 311
(1932).  There is a risk of anachronistic error in apply-
ing our current approach to implied causes of action,
ante, at 12, to a statute enacted when courts commonly
read statutes of this kind broadly to accord with their
remedial purposes and regularly approved rights to sue
despite statutory silence.
 Even had 10(b) not been enacted against a backdrop
of liberal construction of remedial statutes and judicial
favor toward implied rights of action, I would still dis-
agree with the majority for the simple reason that a
-settled construction of an important federal statute
should not be disturbed unless and until Congress so
decides.-  Reves v. Ernst & Young, 494 U. S. 56, 74
(1990) (Stevens, J., concurring).  See Blue Chip Stamps
v. Manor Drug Stores, 421 U. S. 723, 733 (1975) (the
-longstanding acceptance by the courts- and -Congress'
failure to reject- rule announced in landmark Court of
Appeals decision favored retention of the rule).  A
policy of respect for consistent judicial and administra-
tive interpretations leaves it to elected representatives
to assess settled law and to evaluate the merits and
demerits of changing it.  Even when there is no affir-
mative evidence of ratification, the Legislature's failure
to reject a consistent judicial or administrative construc-
tion counsels hesitation from a court asked to invalidate
it.  Cf. Burnet v. Coronado Oil & Gas Co., 285 U. S. 393,
406 (1932) (Brandeis, J., dissenting).  Here, however,
the available evidence suggests congressional approval
 of aider and abettor liability in private 10(b) actions.
In its comprehensive revision of the Exchange Act in
1975, Congress left untouched the sizeable body of case
law approving aiding and abetting liability in private
actions under 10(b) and Rule 10b-5.  The case for
leaving aiding and abetting liability intact draws further
strength from the fact that the SEC itself has consist-
ently understood 10(b) to impose aider and abettor
liability since shortly after the rule's promulgation.  See
Ernst & Young, 494 U. S., at 75 (Stevens, J., concur-
ring).  In short, one need not agree as an original mat-
ter with the many decisions recognizing the private
right against aiders and abettors to concede that the
right fits comfortably within the statutory scheme, and
that it has become a part of the established system of
private enforcement.  We should leave it to Congress to
alter that scheme.
 The Court would be on firmer footing if it had been
shown that aider and abettor liability -detracts from the
effectiveness of the 10b-5 implied action or interferes
with the effective operation of the securities laws.-  See
Musick, Peeler & Garrett v. Employers Ins. of Wausau,
508 U. S. ___, ___ (1993) (slip op., at 11).  However, the
line of decisions recognizing aider and abettor liability
suffers from no such infirmities.  The language of both
10(b) and Rule 10b-5 encompasses -any person- who
violates the Commission's anti-fraud rules, whether
-directly or indirectly-; we have read this -broad- lan-
guage -not technically and restrictively, but flexibly to
effectuate its remedial purposes.-  Affiliated Ute Citizens
of Utah v. United States, 406 U. S. 128, 151 (1972).  In
light of the encompassing language of 10(b), and its
acknowledged purpose to strengthen the anti-fraud
remedies of the common law, it was certainly no wild
extrapolation for courts to conclude that aiders and
abettors should be subject to the private action under
10(b).   Allowing aider and abettor claims in private
10(b) actions can hardly be said to impose unfair legal
duties on those whom Congress has opted to leave
unregulated: Aiders and abettors of 10(b) and Rule
10b-5 violations have always been subject to criminal
liability under 18 U. S. C. 2.  See 15 U. S. C. 78ff
(criminal liability for willful violations of securities
statutes and rules promulgated under them).  Although
the Court canvasses policy arguments against aider and
abettor liability, ante, at 24-25, it does not suggest that
the aiding and abetting theory has had such deleterious
consequences that we should dispense with it on those
grounds.  The agency charged with primary responsi-
bility for enforcing the securities laws does not perceive
such drawbacks, and urges retention of the private right
to sue aiders and abettors.  See Brief for the Securities
and Exchange Commission as Amicus Curiae in Support
of Respondents 5-17.
 As framed by the Court's order redrafting the ques-
tions presented, this case concerns only the existence
and scope of aiding and abetting liability in suits
brought by private parties under 10(b) and Rule 10b-5.
The majority's rationale, however, sweeps far beyond
even those important issues.  The majority leaves little
doubt that the Exchange Act does not even permit the
Commission to pursue aiders and abettors in civil en-
forcement actions under 10b and Rule 10b-5.  See
ante, at 12 (finding it dispositive that -the text of the
1934 Act does not itself reach those who aid and abet a
10(b) violation-).  Aiding and abetting liability has a
long pedigree in civil proceedings brought by the SEC
under 10(b) and Rule 10b-5, and has become an im-
portant part of the Commission's enforcement
arsenal.  Moreover, the majority's approach to aiding
and abetting at the very least casts serious doubt, both
for private and SEC actions, on other forms of secondary
liability that, like the aiding and abetting theory, have
long been recognized by the SEC and the courts but are
not expressly spelled out in the securities statutes.
The principle the Court espouses today-that liability
may not be imposed on parties who are not within the
scope of 10(b)'s plain language-is inconsistent with
long-established Commission and judicial precedent.
 As a general principle, I agree, -the creation of new
rights ought to be left to legislatures, not courts.-
Musick, Peeler, 508  U. S., at ___ (slip op., at 5).  But
judicial restraint does not always favor the narrowest
possible interpretation of rights derived from federal
statutes.  While we are now properly reluctant to recog-
nize private rights of action without an instruction from
Congress, we should also be reluctant to lop off rights of
action that have been recognized for decades, even if the
judicial methodology that gave them birth is now out of
favor.  Caution is particularly appropriate here, because
the judicially recognized right in question accords with
the longstanding construction of the agency Congress
has assigned to enforce the securities laws.  Once again
the Court has refused to build upon a -`secure founda-
tion . . . laid by others,'- Patterson v. McLean Credit
Union, 491 U. S. 164, 222 (1989) (Stevens, J., dissent-
ing) (quoting B. Cardozo, The Nature of the Judicial
Process 149 (1921)).
 I respectfully dissent.