Fed. Sec. L. Rep. P 97,357 Marbury Management, Inc., and Harry Bader, Plaintiffs-Appellants-Appellees v. Alfred Kohn, and Wood, Walker & Co.

In straining to reach a sympathetic result, the majority overlooks a fundamental *717principle of causation which has long prevailed under the common law of fraud and which has been applied to comparable claims brought under the federal securities acts. This is, quite simply, that the injury averred must proceed directly from the wrong alleged and must not be attributable to some supervening cause. This elementary rule precludes recovery in the case at bar since Kohn’s misrepresentations as to his qualifications as a broker in no way caused the decline in the market value of the stocks he…