The U.S. Supreme Court case, Securities and Exchange Commission v. New England Electric System et al., 1965, revolved around the question of whether or not the SEC had overstepped its authority by ordering a utility company to divest itself from certain non-utility companies it owned. The court ruled in favor of the SEC, stating that they were within their rights under the Public Utility Holding Company Act (PUHCA) of 1935 to order such divestiture if they deemed it necessary for simplifying complex holding company structures or preventing unsound business practices. This decision affirmed that PUHCA gave broad powers to SEC in regulating public utilities' investments and affiliations with non-utility businesses.

In the dissenting opinion for SECURITIES AND EXCHANGE COMMISSION v. NEW ENGLAND ELECTRIC SYSTEM et al., Justice Harlan disagreed with the majority's interpretation of Section 11(b)(1) of the Public Utility Holding Company Act. He argued that this section was not intended to force holding companies to divest themselves of all non-integrated utility assets, but rather aimed at preventing further diversification into unrelated businesses. According to him, it should be up to Congress - not courts or administrative agencies - to decide whether a company must divest itself entirely from an industry in which it has been operating lawfully and beneficially for many years. Furthermore, he expressed concern over potential economic consequences resulting from such forced divestitures and questioned whether they were truly necessary for protecting consumers or investors.