In the case of Securities and Exchange Commission v. Capital Gains Research Bureau, Inc., et al., 1963, the U.S. Supreme Court ruled that investment advisers have a fiduciary duty to disclose any potential conflicts of interest to their clients under Section 206 of the Investment Advisers Act of 1940. The court held that non-disclosure constituted fraud even if there was no demonstrable harm or loss suffered by clients as a result. This decision came after an investigation into Capital Gains Research Bureau revealed they were recommending stocks to their subscribers without disclosing they owned shares in those companies and intended to sell them once prices rose due to increased demand from their advice - a practice known as "scalping". The ruling emphasized that full disclosure is essential for maintaining public trust in financial markets.

In the dissenting opinion for SECURITIES AND EXCHANGE COMMISSION v. CAPITAL GAINS RESEARCH BUREAU, INC., Justice Harlan argued that the majority's interpretation of the Investment Advisers Act was overly expansive and not supported by its legislative history. He contended that Congress intended to regulate only those activities which involved a clear conflict of interest between investment advisers and their clients, such as fraud or deceit. The act did not intend to impose fiduciary duties on investment advisers in all aspects of their relationship with clients, as suggested by the majority. Furthermore, he disagreed with the majority's view that non-disclosure could be equated with fraud under this law; instead, he believed it should only apply when there is an intent to deceive or manipulate.