{
  "id": "RS22696",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RS22696",
  "active": false,
  "source": "EveryCRSReport.com",
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      "id": 363693,
      "date": "2007-07-18",
      "retrieved": "2016-04-07T18:00:09.611029",
      "title": "\u201cClear Incompatibility\u201d Between Antitrust and Securities Laws Implies Antitrust Immunity: Credit Suisse Securities v. Billing",
      "summary": "In Credit Suisse Securities v. Billing, the Supreme Court examined whether entities in a heavily regulated industry are necessarily entitled to immunity from prosecution under the federal antitrust laws simply by virtue of their regulated status. The Court had previously ruled that, absent a specific congressional mandate, such immunity may be granted only by findings either of \u201cclear repugnance\u201d between the regulatory scheme and enforcement of the antitrust laws, or sufficiently pervasive regulation of an industry as would be disrupted by application of the antitrust laws; the Credit Suisse opinion reaffirms that reasoning. A class of securities investors alleged that they had paid artificially inflated prices for certain securities because of purportedly antitrust-violative actions taken by the underwriters of some initial public offerings (IPOs). The challenged practices included the formation of syndicates; requiring purchasers of IPOs to make future purchases (\u201claddering\u201d); and requiring purchasers to buy other, less desirable securities (\u201ctying\u201d). In response, defendants/appellants asserted that they were immune to prosecution under the antitrust laws because of the pervasive regulation of the securities industry by the Securities and Exchange Commission (SEC), which administers a comprehensive system of regulation including major parts of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC, they argued, should be the sole arbiter of the validity of their actions, notwithstanding that Congress had not expressly so provided in the applicable legislation. Although the district court, which agreed with the underwriters, dismissed the case, the United States Court of Appeals for the Second Circuit reversed after a lengthy discussion of Supreme Court case law in the area. The Supreme Court reversed the court of appeals, accepting the \u201cpervasive regulation of the securities industry\u201d argument. Specifically, it found that the conduct at issue was \u201cat the core of marketing new securities,\u201d noted that \u201csecurities regulators proceed with great care to distinguish the encouraged and permissible from the forbidden,\u201d and concluded, therefore, \u201cthat the securities laws are \u2018clearly incompatible with the application of the antitrust laws in this context.\u201d This report will not be updated.",
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      "typeId": "REPORTS",
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  "topics": [
    "Aging Policy"
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}