In the United States v. Wurts case of 1937, the Supreme Court ruled on a dispute involving federal jurisdiction over securities fraud. The defendant, Mr. Wurts, was accused of selling fraudulent securities in violation of Section 77q(a) of the Securities Act and argued that his actions did not fall under federal jurisdiction as they were intrastate transactions rather than interstate commerce which would be regulated by Congress. However, the court held that even though these sales occurred within one state (New York), they still affected interstate commerce due to their potential impact on investor confidence across states and thus fell under Congressional regulation according to Commerce Clause powers granted by Constitution's Article I section 8 clause 3 . Therefore, it upheld Wurt’s conviction for violating federal law against fraudulent security sales.

In the dissenting opinion for United States v. Wurts, Justice McReynolds argued that the majority's decision was a departure from established principles of law and an unwarranted expansion of federal power. He contended that Congress did not have the authority to regulate purely local activities under its commerce powers, as it had attempted to do in this case by imposing a tax on margarine colored to resemble butter. According to Justice McReynolds, such regulation should be left up to individual states rather than being handled at a national level. Furthermore, he disagreed with the majority's interpretation of what constituted "commerce," arguing that it was overly broad and could potentially lead to further encroachments on state sovereignty in future cases.