Carpenter v. United States

PETITIONER: David Carpenter
RESPONDENT: United States
LOCATION: Wall Street Journal Corporate Headquarters

DOCKET NO.: 86-422
DECIDED BY: Rehnquist Court (1987-1988)

CITATION: 484 US 19 (1987)
ARGUED: Oct 07, 1987
DECIDED: Nov 16, 1987
GRANTED: Dec 15, 1986

Charles Fried - Solicitor General of the United States, for the Respondent
Don D. Buchwald - For the Petitioner

Facts of the case

R. Foster Winans wrote a column for the Wall Street Journal (WSJ) entitled Heard on the Street (Heard) in which he reported on up-and-coming stocks. In 1983, Winans entered into a scheme that entailed him sending information about the stocks to be featured in Heard to two friends who worked at a brokerage firm. When Heard featured a stock, it generally affected the actual price and quantity of the stock in the market. Over a four-month period, the brokers used Winans’ information regarding stocks yet to be featured in Heard to make trades that resulted in profits of around $690,000. When the Securities and Exchange Commission (SEC) began an investigation, Winans and his co-conspirator Carpenter confessed.

The district court found that Winans had breached the duty of confidentiality he owed the WSJ and found him and his co-conspirators guilty of mail and wire fraud as well as securities violations. The petitioners appealed and argued that, because the WSJ—the only alleged victim of the mail and wire fraud charges—had no interest in the stocks being traded, the conviction should be overturned. The U.S. Court of Appeals for the Second Circuit held that the petitioners’ misappropriation of the upcoming publication schedule was sufficient to establish a case for mail and wire fraud. The Circuit court reasoned that the use of mail and wire services had a sufficient nexus to Winans' knowing breach of his duty of confidentiality he owed the WSJ and that this breach harmed the WSJ.


(1) Can the petitioners be found guilty of securities crimes against the Wall Street Journal even though the Wall Street Journal had no interest in the securities traded?

(2) Did the petitioners use mail and wire services as an essential part of their scheme to defraud the Wall Street Journal of its property?

Media for Carpenter v. United States

Audio Transcription for Oral Argument - October 07, 1987 in Carpenter v. United States

Audio Transcription for Opinion Announcement - November 16, 1987 in Carpenter v. United States

William H. Rehnquist:

The opinion of the Court in Number 86-422, Carpenter against United States will be announced by Justice White.

Byron R. White:

This case is here from the Court of Appeals for the Second Circuit.

The petitioners were convicted for violating the securities laws and the mail and wire fraud statutes.

The Court of Appeals affirmed those convictions and we granted certiorari.

We affirmed the -- all of the judgment below with respect to the securities laws by an equally divided court and for the reasons stated in an opinion filed with the clerk, we affirmed the mail and wire fraud convictions.

The opinion is unanimous.