concurring:
Although the district court considered that transaction causation was “by no means clear,” the court found it unnecessary to resolve the issue “because the evidence definitely fails to establish the necessary loss causation.” AUSA Life Ins. Co. v. Ernst & Young, 991 F.Supp. 234, 249-50 (S.D.N.Y.1997) (emphasis added). The loss, as the court found, was caused chiefly by JWP’s inability to revitalize Businessland, a newly acquired company that unforseeably turned into a “veritable sinkhole” for JWP’s cash and ultimately forced JWP into bankruptcy. Id. at 239, 250.
I.
In my view, the district court has made affirmable fact-findings that plaintiffs’ losses were caused by the implosion of JWP’s Businessland acquisition, and therefore were not caused by E&Y’s misrepresentations that JWP’s books complied with GAAP. Some of the findings of fact needed to support the district court’s conclusion are absent from the section of the district court opinion that speaks to loss causation, but I think that all the necessary factual findings are available elsewhere in the opinion.
The question of loss causation has divided the panel three ways. Judge Oakes’s opinion for the Court properly identifies loss causation as a fact inquiry — distinct from transaction causation — for resolution by the district court, but concludes that the categorical findings needed to decide the case have not been made, and therefore vacates the judgement and remands for further findings on whether E&Y could have reasonably foreseen that its misrepresentations could have led to JWP’s demise — that is, the issue of loss causation.1 Chief Judge Winter’s dissenting opinion argues for reversal on the ground that, in this case, further findings on the issue of loss causation are unnecessary (1) because misrepresentations of the kind in this case understate management’s willingness to take risks, such as the Businessland acquisition, and (2) because such misrepresentations, if corrected, would have disclosed the material datum that management was dishonest. See Dissenting Opinion at 229-SI [hereinafter “Dissent. Op.”].
Chief Judge Winter believes that remand is unnecessary because the particular findings that Judge Oakes would re*225quire (and that Chief Judge Winter deems irrelevant) have already implicitly been made. See Diss. Op. at 229-30 & n.l. I conclude (with Judge Oakes) that loss causation is a distinct fact inquiry for resolution by the district court, and (with Chief Judge Winter) that the district court has already implicitly made all the findings necessary to support a judgment. Unlike Chief Judge Winter, however, I believe that the district court’s findings demonstrate the absence of loss causation. I therefore conclude that the district court’s judgment should be affirmed.
The three opinions on this appeal argue for three different results, a division that would cause the appeal to misfire and leave the case undecided — an unacceptable outcome in a reviewing court. See Action House v. Koolik, 54 F.3d 1009, 1015 (2d Cir.1995) (Newman, C.J., concurring) (citing United States v. Blume, 967 F.2d 45, 50 (2d Cir.1992) (Newman, J., concurring); United States v. O’Grady, 742 F.2d 682, 694 (2d Cir.1984) (in banc) (Newman, J. with whom Winter and Pratt, JJ., join, concurring)).
In order to allow the Court to issue a mandate, I have shifted my vote on the issue of loss causation — from affirmance, to vacatur with a remand for further findings. If, as I think, the district court has implicitly decided the fact question that is now being remanded for consideration, the district court’s express adoption of those findings of fact will under this mandate result in the same judgment that the district court has entered and that I would affirm on the present record and findings. If, as Judge Oakes thinks, the fact question is open, I am content to let the district court decide it, whatever the result. Vaca-tur under the terms of the mandate that Judge Oakes has drawn and that I join will result in a correct outcome as to loss causation. .
II
This Court has long held that there are two necessary and independent components to causation under Section 10(b): transaction causation and loss causation. See Schlick v. Penn-Dixie Cement Corp., 507 F.2d 374, 380 (2d Cir.1974); Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1494 (2d Cir.1992). Thus Judge Conner held that the plaintiffs “must prove not only that they would not have purchased JWP’s notes but for [E & Y’s] representations (transaction causation) but also that JWP would not have defaulted on its obligations on the notes if JWP’s financial condition had been as represented (loss causation).” AUSA Life Ins. Co., 991 F.Supp. at 249.
In concluding that “the evidence definitely fails to establish the necessary loss causation,” id. at 250, the district court found that there were several causes, chief among them JWP’s inability to revitalize Businessland, a depressed market for commercial construction, and fierce competition in the PC market — not E & Y’s misrepresentations. See id. at 250.
Judge Oakes believes that the district court’s discussion of loss causation fails to decide whether JWP would have been able to purchase Businessland absent E & Y’s misstatements. See Majority Opinion at 217 [hereinafter “Maj. Op.”]. I think that is the wrong question. It has been found— and all opinions on appeal agree — that JWP’s acquisition of Businessland was a calamity that overwhelmed all other financial circumstances and brought about JWP’s bankruptcy. Therefore, I think that the loss causation inquiry should be: Was it foreseeable that E & Y’s misstatement of accounts would cause the plaintiffs to suffer losses caused by the disastrous Businessland acquisition? In my view, the question is sufficiently answered by the district court’s findings that the plaintiffs’ chief investment concern was JWP’s actual cash flow (which was perfectly adequate to fund plaintiffs’ bonds and was unaffected by the misrepresentations) and that the disastrous nature of the Businessland investment was unforeseeable. See AUSA Life Ins. Co., 991 F.Supp. at 239, 250.
*226Loss causation requires the plaintiffs to prove more than simply that E & Y induced them to enter into an ultimately unsuccessful investment. Such a “but-for” analysis would collapse loss causation into transaction causation. See Citibank, 968 F.2d at 1495 (transaction causation “requires the plaintiff to allege that the misrepresentation induced it to enter into the transaction”). Rather, loss causation requires proof that the E & Y’s “misrepresentation was the cause of the actual loss suffered.” Id. The damages suffered by the plaintiffs must be “a foreseeable consequence of the misrepresentation.” Id. In this sense, loss causation closely corresponds to the common law principle of proximate cause. See Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 967 F.2d 742, 747 (2d Cir.1992).
I can find no flaw in the district court’s application of loss causation principles to this case.
As an initial matter, the disastrous events subsequent to the Businessland acquisition were not a foreseeable consequence of E & Y’s misrepresentations. JWP defaulted on the plaintiffs’ notes as a result of its acquisition of Businessland in 1991. According to the testimony of JWP’s former Chief Executive Officer, credited by the district court, Businessland became “a veritable sinkhole for cash” that would have bankrupted JWP even if JWP’s books were as represented. AUSA Life Ins. Co., 991 F.Supp. at 250. There is no credible allegation that JWP would have defaulted in 1993 in the absence of the acquisition. See id. Therefore, neither E & Y nor JWP could have foreseen that their misrepresentations would have resulted in JWP’s insolvency and the nonpayment of the bond obligations.
Judge Oakes frames the foreseeability question in terms of “whether E & Y could have reasonably foreseen that their certification of false financial information could lead to the demise of JWP, by enabling JWP to make an acquisition that otherwise would have been subjected to higher scrutiny, which led to harm to the investors.” Maj. Op. at 217. I think that this “enabling” issue is a variant of but-for causation, and that the relevant inquiry (considering that JWP’s failure and bankruptcy is the proximate cause of the bondholders’ loss) is whether E & Y’s misrepresentations could foreseeably have led to the failure of the company. As to this question, the district court’s factual findings are clear enough:
JWP’s insolvency and resulting default on its note obligations were caused not by the differences between its actual financial condition and that reflected in its audited reports, but by much more significant factors, including JWP’s disastrous acquisition of the failing Busi-nessland, in combination with the downturn in commercial construction and fierce competition in the PC market.
AUSA Life Ins. Co., 991 F.Supp. at 250 (emphasis added).
Whether or not the acquisition was a foreseeable consequence of the misrepresentations cannot matter unless the misrepresentations are shown to have caused the resulting collapse. Even if one assumes (a stretch) that E & Y’s misrepresentations allowed JWP to buy Business-land, E & Y’s misrepresentations were not the reason for the resulting company’s failure: JWP’s ruin is easily attributable to business factors that were more potent than E & Y’s misrepresentations, and were unrelated to them. See AUSA Life Ins. Co., 991 F.Supp. at 238-39, 250. The dis-positive question is whether the JWP/Busi-nessland combination would have collapsed even if JWP’s books were accurately stated.
Judge Oakes heavily relies on this Court’s analysis in Marbury Management, Inc. v. Kohn, 629 F.2d 705 (2d Cir.1980). In that case, the compelling facts were that Alfred Kohn, a broker-trainee but not yet a broker, repeatedly told the customers that he was a broker. See id. at 707. Believing that Kohn was a broker, the *227plaintiffs bought and held securities on his recommendation, only to incur losses on their purchases. See id. It was clear that if the plaintiffs had known what was concealed — that broker-trainee Kohn was not the licensed broker he claimed to be — they would have declined to purchase the securities recommended by Kohn, and certainly would have sold the securities when they began to lose value: “Kohn’s statements by their nature induced both the purchase and the retention of the securities, the expertise implicit in Kohn’s supposed status overcoming plaintiffs’ misgivings prompted by the market behavior of the securities.” Marbury Management, 629 F.2d at 708 & n. 2 (emphasis added).
Though one can debate whether the circumstances that were said to be loss causation in Marbury amount to anything more than transaction causation, Marbury does not purport to change the rule— which we have consistently applied before and since — that a 10(b) claim cannot succeed unless loss causation is demonstrated. We would be bound by Marbury to rule the same way on the same set of facts, but I think it would be a mistake to treat the Marbury facts as a template for loss causation and say (as I think my colleagues say) that under Marbury, loss causation can be satisfied by a nondisclosure that does no more than cause the investor to buy and hold during a drop in the market price induced by other causes. This Court has never read Marbury to hold that transaction causation subsumes loss causation. Indeed the language of Marbury itself confirms this Court’s tradition of considering the two separately: “[T]he loss complained of must proceed directly and proximately from the violation claimed and not be attributable to some supervening cause.” Id. at 719 (citation omitted).
To collapse loss causation into transaction causation would distort the traditional application of Section 10(b). After all, private suits under Section 10(b) are a judge-made cause of action. See Lampf Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 359, 111 S.Ct. 2773, 2779-80, 115 L.Ed.2d 321 (1991); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 196 n. 16, 96 S.Ct. 1375, 1382 n. 16, 47 L.Ed.2d 668 (1976). By requiring both transaction causation and loss causation, section 10(b) sets a high bar for recovery, and deliberately so. There is a particular reluctance to expand liability in any direction, see Central Bank v. First Interstate Bank, 511 U.S. 164, 177-78, 114 S.Ct. 1439, 1448, 128 L.Ed.2d 119 (1994); Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 464, 97 S.Ct. 1292, 1296, 51 L.Ed.2d 480 (1977); Ernst & Ernst, 425 U.S. at 197, 96 S.Ct. at 1383, let alone merge the required elements of the cause of action.
The misrepresentations in JWP’s books (concerning treatment of acquisition costs, small tool inventories, net operating losses, and software costs) were not the proximate cause — ie., the loss causation — for the plaintiffs’ loss. Those misrepresentations affected JWP’s apparent cash flow, but they had no effect on JWP’s actual cash flow. See AUSA Life Ins. Co., 991 F.Supp. at 250. This is a critical distinction. While JWP’s equity investors were rightfully concerned with the discrepancies in the company’s books (because such variances would have affected the company’s stock price), JWP’s debt holders — the plaintiffs — would not necessarily have had cause for alarm. See id. The primary concern of a debt holder is actual cash flow, the ability of the debt issuer to pay interest and principal as required. See id. Indeed, even after JWP’s annual reports were restated, the company continued to meet its interest payment schedule. See id.
The district court’s findings suggest that the plaintiffs would have remained invested in JWP notwithstanding the Business-land acquisition even if they had known of the discrepancies in JWP’s books, because prior to acquisition there was no indication that Businessland would become the “sinkhole for cash” that it became. Id. There is also no allegation that the plaintiffs would *228have somehow prevented JWP from acquiring Businessland had they known of JWP’s true financial condition. Therefore, JWP would still have been able to proceed with the acquisition that would have led to its insolvency and the plaintiffs’ losses.
Moreover, it is hard to see how, had the auditors done a proper job, the bondholders would have been better situated or made more prescient. If, as it should have, E & Y had resisted JWP’s pressure to misrepresent the company’s financial condition, the bondholders would have received an accurate statement of accounts. But E & Y would not have been required to disclose management’s thwarted desire to dress up the numbers. The job of the accountant is to ensure, within the parameters of the audit letter, that accounts comply with sound accounting practice. The accountant’s duty is to do this regardless of pressure from managers to present the company’s financial status as favorably as they can. But that obligation does not require disclosure of management’s pressure to make the overly favorable representation. See Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 477-78, 97 S.Ct. 1292, 1303, 51 L.Ed.2d 480 (1977).
Chief Judge Winter argues, however, that after the first year’s misrepresentations, a restatement of accounts would have revealed that the previous financial statements had been knowingly falsified, and that such a disclosure would cause any investor, including debt holders, to jump ship. See Diss. Op. at 229-31. Chief Judge Winter believes that knowledge of book-cooking would have dual effects, either of which is sufficient to demonstrate loss causation: (1) it would expose management’s crookedness, and (2) it would warn investors that management may have an incentive to take greater risks. See Diss. Op. at 230-31. Assuming (as I do not) that such a disclosure would have prevented the plaintiffs’ losses, I doubt that such a disclosure would be required. No doubt, the auditors owed the plaintiffs (and others) a corrected statement of accounts over a several-year period, but there is no basis for holding that correction of the figures would require a disclosure that management corruptly insisted on making the initial (false) representations. Under Santa Fe Industries, 430 U.S. at 477-78, 97 S.Ct. at 1303, the duty to disclose facts (here, the numbers) does not entail a duty — on the part of the accountant — to disclose culpability or impure motives. Thus Santa Fe Industries holds that a section 10(b) plaintiff cannot transform a fiduciary-duty claim or a mismanagement claim into a claim of non-disclosure. See Panter v. Marshall Field & Co., 646 F.2d 271, 287-88 (7th Cir.1981); Levine v. Prudential Bache Properties, Inc., 855 F.Supp. 924, 933-34 (N.D.Ill.1994); Bucher v. Shumway, (1979-80 Transfer Binder) Fed. Sec. L. Rep. (CCH) ¶ 97,142, at 96,300, 1979 WL 1254 (S.D.N.Y.1979) (“The securities laws, while their central insistence is upon disclosure, were never intended to attempt any such measures of psychoanalysis or p[ur]ported self-analysis.”), aff'd, 622 F.2d 572 (2d Cir.1980).
In short, the proximate cause of the plaintiffs’ losses was the failure of the Businessland acquisition, which was not a foreseeable result of E & Y’s conduct.
. Judge Oakes goes on to find transaction causation and scienter. Because I believe the loss causation issue is dispositive of the federal claim, I would not reach these questions.