In the case of Securities and Exchange Commission v. Charles Zandford, 2001, the Supreme Court ruled in favor of the SEC. The defendant, Charles Zandford was a stockbroker who had been convicted for defrauding his clients by selling their securities without consent and keeping proceeds for himself under a "discretionary" account agreement. He argued that his actions were not covered by federal law as they did not involve any fraudulent practice “in connection with” purchase or sale of any security as stated in Section 10(b) of Securities Exchange Act (1934). However, the court held that Zandford's fraudulent practices were indeed connected to sales because he sold securities with intent to misappropriate proceeds which is within scope of section 10(b). Therefore, it affirmed lower courts' decisions holding him liable for violating anti-fraud provisions.

In the dissenting opinion for SECURITIES AND EXCHANGE COMMISSION v. CHARLES ZANDFORD, Justice Scalia disagreed with the majority's interpretation of the term "in connection with" in §10(b) of Securities Exchange Act. He argued that this phrase should be interpreted more narrowly to only cover fraudulent practices directly related to securities transactions, not any fraud that happens to involve securities as part of a broader scheme. In his view, Zandford's actions were primarily about defrauding clients out of their money rather than manipulating or deceiving them about specific securities trades. Therefore, he believed these actions fell outside the scope of §10(b). Furthermore, he expressed concern that such broad interpretations could lead to overreach by federal regulators and potentially infringe on areas traditionally regulated by state law.