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SEC v. Cochran

Fiduciary duty of disclosure under Section 10(b) may be premised on federal or state law; under Oklahoma common law, fact issues barred summary judgment in favor of securities fraud defendant accused of breaching duty by failing to disclose alleged "rigging" of reinvestment contract bids and payments from contract recipients to underwriter.

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LUCERO, Circuit Judge.

This securities fraud action arises from the alleged acts and omissions of an employee of a bond underwriter that occurred while he was advising governmentalagencies regarding the issuance of bonds and the interim reinvestment of the proceeds from the bond issues. We must resolve two questions: first, whether theunderwriter’s employee owed those agencies a duty to disclose his alleged “rigging” of reinvestment contract bids and payments made by the recipients of thereinvestment contracts to the underwriter; and second, whether such undisclosed information would have been material to those agencies. Exercising jurisdictionpursuant to 28 U.S.C. � 1291, we hold that a duty to disclose can be premised on either federal or state law. Applying Oklahoma common law, we conclude thatthe evidence in the record is sufficient to create a genuine issue of material fact as to whether a relationship of trust and confidence giving rise to a duty to discloseexisted between the defendant and the governmental agencies. We also conclude there is a genuine issue of material fact as to whether the payments and allegedbid-rigging would have been material to those agencies.

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