In the case of Third National Bank in Nashville v. Impac Limited, Inc., et al., 1976, the U.S Supreme Court was tasked with determining whether a bank could be held liable for aiding and abetting fraud by its customers. The dispute arose when Third National Bank in Nashville (TNB) extended loans to two individuals who used these funds to purchase stock from Impac Limited, Inc. When it was discovered that these individuals had misrepresented their financial status to obtain the loans and subsequently defaulted on them, Impac sued TNB alleging that they were complicit in this fraudulent activity. The court ruled against Impac stating that there was no evidence showing TNB knowingly participated or assisted in any fraudulent activities conducted by their borrowers. It further explained that banks have an obligation to maintain confidentiality regarding customer transactions unless presented with a court order or other legal requirement demanding disclosure. This ruling clarified the extent of liability for financial institutions concerning potential misconduct by their clients; essentially establishing that without clear proof of intentional participation or assistance in such actions, banks cannot be held accountable for independent fraudulent acts committed by their customers.

The dissenting opinion in the case of Third National Bank in Nashville v. Impac Limited, Inc., argued that the majority's decision to allow a bank to sue for damages under Section 10(b) and Rule 10b-5 of the Securities Exchange Act was incorrect. The dissenters contended that these provisions were intended only to protect purchasers or sellers of securities from fraud, not banks acting as trustees. They believed this interpretation extended beyond Congress' intent when it enacted these laws and could potentially open up an unmanageable floodgate of litigation against fiduciaries who are merely performing their duties. Furthermore, they disagreed with the majority's assertion that allowing such suits would further public policy objectives by deterring fraudulent practices; instead, they feared it might deter banks from serving as trustees altogether due to potential liability risks.