In the case of The Wharf (Holdings) Limited v. United International Holdings, Inc., 2000, the U.S Supreme Court ruled in favor of United International Holdings (UIH). The dispute arose when UIH claimed that it had been defrauded by Wharf Holdings after they reneged on an oral agreement to sell UIH a stake in a cable television venture. Wharf argued that such agreements were unenforceable under Hong Kong law and therefore could not form the basis for a fraud claim under U.S federal securities laws. However, the court held that even if an agreement is unenforceable under local law, it can still be considered as part of a "purchase or sale" transaction covered by Section 10(b) and Rule 10b-5 of Securities Exchange Act - which prohibits fraudulent activities in connection with purchase or sale of security - thereby allowing claims based on such agreements to proceed.

In the dissenting opinion for The Wharf (Holdings) Limited v. United International Holdings, Inc., Justice Scalia argued that the majority's decision to allow a claim under §10(b) of the Securities Exchange Act was incorrect because it expanded its scope beyond what Congress intended. He contended that this section only covers deceptive conduct related to buying or selling securities, not all fraudulent behavior involving them. In this case, he believed there was no deception in purchasing or selling securities as United merely promised to sell an option and then broke that promise; thus it should be treated as a breach of contract rather than security fraud. Furthermore, he criticized the majority's reliance on precedents which themselves had broadened §10(b)'s reach without proper justification from statutory text or legislative history.