In the case of Henry L. Doherty & Co. v. Goodman, 1934, the U.S Supreme Court ruled on a dispute involving stock transactions and fiduciary duty between an investment company (Henry L. Doherty & Co.) and one of its clients (Goodman). The court held that when a broker is also a dealer in securities, there's an obligation to disclose this fact to their client before they can be absolved from liability for profits made from purchasing stocks sold by them without informing the customer about it beforehand. This ruling was based on Section 16(b) of the Securities Exchange Act which prohibits short-swing profits earned through any equity security-based transaction within less than six months by corporate insiders such as officers or directors who own more than ten percent of any class of equity securities registered under section 12.

In the dissenting opinion for Henry L. Doherty & Co. v. Goodman, Justice Benjamin N. Cardozo disagreed with the majority's decision to reverse and remand the case back to lower court due to a lack of evidence supporting negligence on part of Doherty & Co., which resulted in Goodman's financial loss after investing in oil leases based on their advice. He argued that there was sufficient evidence showing that Doherty & Co had failed in its duty as an investment advisor by not disclosing all relevant information about potential risks associated with these investments, thereby misleading Goodman into making uninformed decisions leading to his losses.