dissenting.
I believe that the jury instructions in this case properly charged a violation of § 10 (b) and Rule 10b-5, and I would affirm the conviction.
I
As a general rule, neither party to an arm’s-length business transaction has an obligation to disclose information to the *240other unless the parties stand in some confidential or fiduciary-relation. See W. Prosser, Law of Torts § 106 (2d ed. 1955). This rule permits a businessman to capitalize on his experience and skill in securing and evaluating relevant information ; it provides incentive for hard work, careful analysis, and astute forecasting. But the policies that underlie the rule also should limit its scope. In particular, the rule should give way when an informational advantage is obtained, not by superior experience, foresight, or industry, but by some unlawful means. One commentator has written:
“[T]he way in which the buyer acquires the information which he conceals from the vendor should be a material circumstance. The information might have been acquired as the result of his bringing to bear a superior knowledge, intelligence, skill or technical judgment; it might have been acquired by mere chance; or it might have been acquired by means of some tortious action on his part. . . . Any time information is acquired by an illegal act it would seem that there should be a duty to disclose that informationKeeton, Fraud — Concealment and NonDisclosure, 15 Texas L. Rev. 1, 25-26 (1936) (emphasis added).
I would read § 10 (b) and Rule 10b-5 to encompass and build on this principle: to mean that a person who has misappropriated nonpublie information has an absolute duty to disclose that information or to refrain from trading.
The language of § 10 (b) and of Rule 10b-5 plainly supports such a reading. By their terms, these provisions reach any person engaged in any fraudulent scheme. This broad language negates the suggestion that congressional concern was limited to trading by “corporate insiders” or to deceptive practices related to “corporate information.”1 Just as surely *241Congress cannot have intended one standard of fair dealing for “white collar” insiders and another for the “blue collar” level. The very language of § 10 (b) and Rule 10b-5 “by repeated use of the word ‘any’ [was] obviously meant to be inclusive.” Affiliated Ute Citizens v. United States, 406 U. S. 128, 161 (1972).
The history of the statute and of the Rule also supports this reading. The antifraud provisions were designed in large measure “to assure that dealing in securities is fair and without undue preferences or advantages among investors.” H. R. Conf. Rep. No. 94-229, p. 91 (1975). These provisions prohibit “those manipulative and deceptive practices which have been demonstrated to fulfill no useful function.” S. Rep. No. 792, 73d Cong., 2d Sess., 6 (1934). An investor who purchases securities on the basis of misappropriated nonpublic information possesses just such an “undue” trading advantage; his conduct quite clearly serves no useful function except his own enrichment at the expense of others.
This interpretation of § 10 (b) and Rule 10b-5 is in no sense novel. It follows naturally from legal principles enunciated by the Securities and Exchange Commission in its seminal Cady, Roberts decision. 40 S. E. C. 907 (1961). There, the Commission relied upon two factors to impose a duty to disclose on corporate insiders: (1) “. . . access ... to information intended to be available only for a corporate purpose and not for the personal benefit of anyone” (emphasis added); and (2) the unfairness inherent in trading on such information when it is inaccessible to those with whom one is dealing. Both of these factors are present whenever a party gains an *242informational advantage by unlawful means.2 Indeed, in In re Blyth & Co., 43 S. E. C. 1037 (1969), the Commission applied its Cady, Roberts decision in just such a context. In that case a broker-dealer had traded in Government securities on the basis of confidential Treasury Department information which it received from a Federal Reserve Bank employee. The Commission ruled that the trading was “improper use of inside information” in violation of § 10 (b) and Rule 10b-5. 43 S. E. C., at 1040. It did not hesitate to extend Cady, Roberts to reach a “tippee” of a Government insider.3
Finally, it bears emphasis that this reading of §10b and Rule 10b-5 would not threaten legitimate business practices. So read, the antifraud provisions would not impose a duty on a tender offeror to disclose its acquisition plans during the period in which it “tests the water” prior to purchasing a full 5% of the target company’s stock. Nor would it proscribe “warehousing.” See generally SEC, Institutional Investor Study Report, H. R. Doc. No. 92-64, pt. 4, p. 2273 (1971). Likewise, market specialists would not be subject to a disclose-or-refrain requirement in the performance of their every*243day market functions. In each of these instances, trading is accomplished on the basis of material, nonpublic information, but the information has not been unlawfully converted for personal gain.
II
The Court’s opinion, as I read it, leaves open the question whether § 10 (b) and Rule 10b-5 prohibit trading on misappropriated nonpublic information.4 Instead, the Court apparently concludes that this theory of the case was not submitted to the jury. In the Court’s view, the instructions given the jury were premised on the erroneous notion that the mere failure to disclose nonpublic information, however acquired, is a deceptive practice. And because of this premise, the jury was not instructed that the means by which Chiarella acquired his informational advantage — by violating a duty owed to the acquiring companies — was an element of the offense. See ante, at 236.
The Court’s reading of the District Court’s charge is unduly restrictive. Fairly read as a whole and in the context of the trial, the instructions required the jury to find that Chiarella obtained his trading advantage by misappropriating the property of his employer’s customers. The jury was charged that "[i]n simple terms, the charge is that Chiarella wrongfully took advantage of information he acquired in the course of his confidential position at Pandick Press and secretly used that information when he knew other people trading in the securities market did not have access to. the same information *244that he had at a time when he knew that that information was material to the value of the stock.” Record 677 (emphasis added). The language parallels that in the indictment, and the jury had that indictment during its deliberations; it charged that Chiarella had traded “without disclosing the material non-public information he had obtained in connection with his employment.” It is underscored by the clarity which thé prosecutor exhibited in his opening statement to the jury. No juror could possibly have failed to understand what the case was about after the prosecutor said: “In sum what the indictment charges is that Chiarella misused material nonpublic information for personal gain and that he took unfair advantage of his position of trust with the full knowledge that it was wrong to do so. That is what the case is about. It is that simple.” Id., at 46. Moreover, experienced defense counsel took no exception and uttered no complaint that the instructions were inadequate in this regard.
In any event, even assuming the instructions were deficient in not charging misappropriation with sufficient precision, on this record any error was harmless beyond a reasonable doubt. Here, Chiarella, himself, testified that he obtained his informational advantage by decoding confidential material entrusted to his employer by its customers. Id., at 474-475. He admitted that the information he traded on was “confidential,” not “to be use[d] ... for personal gain.” Id., at 496. In light of this testimony, it is simply inconceivable to me that any shortcoming in the instructions could have “possibly influenced the jury adversely to [the defendant].” Chapman v. California, 386 U. S. 18, 23 (1967). See also United States v. Park, 421 U. S. 658, 673-676 (1975). Even more telling perhaps is Chiarella’s counsel’s statement in closing argument:
“Let me say right up front, too, Mr. Chiarella got on the stand and he conceded, he said candidly, T used clues I got while I was at work. I looked at these various doc*245uments and I deciphered them and I decoded them and I used that information as a basis for purchasing stock.’ There is no question about that. We don’t have to go through a hullabaloo about that. It is something he concedes. There is no mystery about that.” Record 621.
In this Court, counsel similarly conceded that “[w]e do not dispute the proposition that Chiarella violated his duty as an agent of the offeror corporations not to use their confidential information for personal profit.” Reply Brief for Petitioner 4 (emphasis added). See Restatement (Second) of Agency § 395 (1958). These statements are tantamount to a formal stipulation that Chiarella’s informational advantage was unlawfully obtained. And it is established law that a stipulation related to an essential element of a crime must be regarded by the jury as a fact conclusively proved. See 8 J. Wigmore, Evidence §2590 (McNaughton rev. 1961); United States v. Houston, 547 E. 2d 104 (CA9 1976).
In sum, the evidence shows beyond all doubt that Chiarella, working literally in the shadows of the warning signs in the printshop, misappropriated — stole to put it bluntly — valuable nonpublic information entrusted to him in the utmost confidence. He then exploited his ill-gotten informational advantage by purchasing securities in the market. In my view, such conduct plainly violates § 10 (b) and Rule 10b-5. Accordingly, I would affirm the judgment of the Court of Appeals.
Mr. Justice Blackmun, with whom Mr. Justice Marshall joins, dissenting.Although I agree with much of what is said in Part I of the dissenting opinion of The Chief Justice, ante, p. 239,1 write separately because, in my view, it is unnecessary to rest petitioner’s conviction on a “misappropriation” theory. The fact that petitioner Chiarella purloined, or, to use The Chief *246Justice’s word, ante, at 245, “stole,” information concerning pending tender offers certainly is the most dramatic evidence that petitioner was guilty of fraud. He has conceded that he knew it was wrong, and he and his co-workers in the print-shop were specifically warned by their employer that actions of this kind were improper and forbidden. But I also would find petitioner’s conduct fraudulent within the meaning of § 10 (b) of the Securities Exchange Act of 1934, 15 U. S. C. § 78j (b), and the Securities and Exchange Commission’s Rule 10b-5, 17 CFR § 240.10b-5 (1979), even if he had obtained the blessing of his employer’s principals before embarking on his profiteering scheme. Indeed, I think petitioner’s brand of manipulative trading, with or without such approval, lies close to the heart of what the securities laws are intended to prohibit.
The Court continues to pursue a course, charted in certain recent decisions, designed to transform § 10 (b) from an intentionally elastic “catchall” provision to one that catches relatively little of the misbehavior that all too often makes investment in securities a needlessly risky business for the uninitiated investor. See, e. g., Ernst & Ernst v. Hochfelder, 425 U. S. 185 (1976); Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723 (1975). Such confinement in this case is now achieved by imposition of a requirement of a “special relationship” akin to fiduciary duty before the statute gives rise to a duty to disclose or to abstain from trading upon material, nonpublic information.1 The Court admits that this conclusion finds no mandate in the language of the statute or its legislative history. Ante, at 226. Yet the Court fails even to attempt a justification of its ruling in terms of the purposes *247of the securities laws, or to square that ruling with the longstanding but now much abused principle that the federal securities laws are to be construed flexibly rather than with narrow technicality. See Affiliated Ute Citizens v. United States, 406 U. S. 128, 161 (1972); Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U. S. 6, 12 (1971); SEC v. Capital Gains Research Bureau, 375 U. S. 180, 186 (1963).
I, of course, agree with the Court that a relationship of trust can establish a duty to disclose under § 10 (b) and Rule 10b-5. But I do not agree that a failure to disclose violates the Rule only when the responsibilities of a relationship of that kind have been breached. As applied to this case, the Court’s approach unduly minimizes the importance of petitioner’s access to confidential information that the honest investor, no matter how diligently he tried, could not legally obtain. In doing so, it further advances an interpretation of § 10 (b) and Rule 10b-5 that stops short of their full implications. Although the Court draws support for its position from certain precedent, I find its decision neither fully consistent with developments in the common law of fraud, nor fully in step with administrative and judicial application of Rule 10b-5 to “insider” trading.
The common law of actionable misrepresentation long has treated the possession of “special facts” as a key ingredient in the duty to disclose. See Strong v. Repide, 213 U. S. 419, 431-433 (1909); 1 F. Harper & F. James, Law of Torts § 7.14 (1956). Traditionally, this factor has been prominent in cases involving confidential or fiduciary relations, where one party’s inferiority of knowledge and dependence upon fair treatment is a matter of legal definition, as well as in cases where one party is on notice that the other is “acting under a mistaken belief with respect to a material fact.” Frigitemp Corp. v. Financial Dynamics Fund, Inc,, 524 F. 2d 275, 283 (CA2 1975); see also Restatement of Torts §551 (1938). Even at common law, however, there has been a trend away from strict adherence to the harsh maxim caveat emptor and *248toward a more flexible, less formalistic understanding of the duty to disclose. See, e. g., Keeton, Fraud — Concealment and Non-Disclosure, 15 Texas L. Rev. 1, 31 (1936). Steps have been taken toward application of the “special facts” doctrine in a broader array of contexts where one party’s superior knowledge of essential facts renders a transaction without disclosure inherently unfair. See James & Gray, Misrepresentation-Part II, 37 Md. L. Rev. 488, 526-527 (1978); 3 Restatement (Second) of Torts § 551 (e), Comment l (1977); id., at 166-167 (Tent. Draft No. 10, 1964). See also Lingsch v. Savage, 213 Cal. App. 2d 729, 735-737, 29 Cal. Rptr. 201, 204-206 (1963); Jenkins v. McCormick, 184 Kan. 842, 844-845, 339 P. 2d 8, 11 (1959); Jones v. Arnold, 359 Mo. 161, 169-170, 221 S. W. 2d 187, 193-194 (1949); Simmons v. Evans, 185 Tenn. 282, 285-287, 206 S. W. 2d 295, 296-297 (1947).
By its narrow construction of § 10 (b) and Rule 10b-5, the Court places the federal securities laws in the rearguard of this movement, a position opposite to the expectations of Congress at the time the securities laws were enacted. Cf. H. R. Rep. No. 1383, 73d Cong., 2d Sess., 5 (1934). I cannot agree that the statute and Rule are so limited. The Court has observed that the securities laws were not intended to replicate the law of fiduciary relations. Santa Fe Industries, Inc. v. Green, 430 U. S. 462, 474-476 (1977). Rather, their purpose is to ensure the fair and honest functioning of impersonal national securities markets where common-law protections have proved inadequate. Cf. United States v. Naftalin, 441 U. S. 768, 775 (1979). As Congress itself has recognized, it is integral to this purpose “to assure that dealing in securities is fair and without undue preferences or advantages among investors.” H. R. Conf. Rep. No. 94-229, p. 91 (1975).
Indeed, the importance of access to “special facts” has been a recurrent theme in administrative and judicial application *249of Rule 10b-5 to insider trading. Both the SEC. and the courts have stressed the insider’s misuse of secret knowledge as the gravamen of illegal conduct. The Court, I think, unduly minimizes this aspect of prior decisions.
Cady, Roberts Co., 40 S. E. C. 907 (1961), which the Court discusses at some length, provides an illustration. In that case, the Commission defined the category of “insiders” subject to a disclose-or-abstain obligation according to two factors:
“[Fjirst, the existence of a relationship giving access, directly or indirectly, to information intended to be available only for a corporate purpose and not for the personal benefit of anyone, and second, the inherent unfairness involved where a party takes advantage of such information knowing it is unavailable to those with whom he is dealing.” Id., at 912 (footnote omitted).
The Commission, thus, regarded the insider “relationship” primarily in terms of access to nonpublic information, and not merely in terms of the presence of a common-law fiduciary duty or the like. This approach was deemed to be in keeping with the principle that “the broad language of the anti-fraud provisions” should not be “circumscribed by fine distinctions and rigid classifications,” such as those that prevailed under the common law. Ibid. The duty to abstain or disclose arose, not merely as an incident of fiduciary responsibility, but as a result of the “inherent unfairness” of turning secret information to account for personal profit. This understanding of Rule 10b-5 was reinforced when Investors Management Co., 44 S. E. C. 633, 643 (1971), specifically rejected the contention that a “special relationship” between the alleged violator and an “insider” source was a necessary requirement for liability.
A similar approach has been followed by the courts. In SEC v. Texas Gulf Sulphur Co., 401 F. 2d 833, 848 (CA2 *2501968) (en banc), cert. denied sub nom. Coates v. SEC, 394 U. S. 976 (1969), the court specifically mentioned the common-law “special facts” doctrine as one source for Rule 10b-5, and it reasoned that the Rule is “based in policy on the justifiable expectation of the securities marketplace that all investors trading on impersonal exchanges have relatively equal access to material information.” See also Lewelling v. First California Co., 564 F. 2d 1277, 1280 (CA9 1977); Speed v. Transamerica Corp., 99 F. Supp. 808, 829 (Del. 1951). In addition, cases such as Mysel v. Fields, 386 F. 2d 7l8, 739 (CA8 1967), cert. denied, 390 U. S. 951 (1968), and A. T. Brod & Co. v. Perlow, 375 F. 2d 393, 397 (CA2 1967), have stressed that § 10 (b) and Rule 10b-5 apply to any kind of fraud by any person. The concept of the “insider” itself has been flexible; wherever confidential information has been abused, prophylaxis has. followed. See, e. g., Zweig v. Hearst Corp., 594 F. 2d 1261 (CA9 1979) (financial columnist); Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F. 2d 228 (CA2 1974) (institutional investor); SEC v. Shapiro, 494 F. 2d 1301 (CA2 1974) (merger negotiator); Chasins v. Smith, Barney & Co., 438 F. 2d 1167 (CA2 1970) (market maker). See generally 2 A. Bromberg & L. Lowen-fels, Securities Law & Commodities Fraud § 7.4 (6) (b) (1979).
I believe, and surely thought, that this broad understanding of the duty to disclose under Rule 10b-5 was recognized and approved in Affiliated Ute Citizens v. United States, 406 U. S. 128 (1972). That case held that bank agents dealing in the stock of a Ute Indian development corporation had a duty to reveal to mixed-blood Indian customers that their shares could bring a higher price on a non-Indian market of which the sellers were unaware. Id., at 150-153. The Court recognized that “by repeated use of the word 'any,' ” the statute and Rule “are obviously meant to be inclusive.” Id., at 151. Although it found a relationship of trust between *251the agents and the Indian sellers, the Court also clearly established that the bank and its agents were subject to the strictures of Rule 10b-5 because of their strategic position in the marketplace. The Indian sellers had no knowledge of the non-Indian market. The bank agents, in contrast, had intimate familiarity with the non-Indian market, which they had promoted actively, and from which they and their bank both profited. In these circumstances, the Court held that the bank and its agents “possessed the affirmative duty under the Rule” to disclose market information to the Indian sellers, and that the latter “had the right to know” that their shares would sell for a higher price in another market. Id., at 153.
It seems to me that the Court, ante, at 229-230, gives Affiliated Ute Citizens an unduly narrow interpretation. As I now read my opinion there for the Court, it lends strong support to the principle that a structural disparity in access to material information is a critical factor under Rule 10b-5 in establishing a duty either to disclose the information or to abstain from trading. Given the factual posture of the case, it was unnecessary to resolve the question whether such a structural disparity could sustain a duty to disclose even absent “a relationship of trust and confidence between parties to a transaction.” Ante, at 230. Nevertheless, I think the rationale of Affiliated Ute Citizens definitely points toward an affirmative answer to that question. Although I am not sure I fully accept the “market insider” category created by the Court of Appeals, I would hold that persons having access to confidential material information that is not legally available to others generally are prohibited by Rule 10b-5 from engaging in schemes to exploit their structural informational advantage through trading in affected securities. To hold otherwise, it seems to me, is to tolerate a wide range of manipulative and deceitful behavior. See Blyth & Co., 43 S. E. C. 1037 (1969); Herbert L. Honohan, 13 S. E. C. 754 (1943); see generally Brudney, Insiders, Outsiders, and Informational Advantages *252under the Federal Securities Laws, 93 Harv. L. Rev. 322 (1979).2
Whatever the outer limits of the Rule, petitioner Chiarella’s case fits neatly near the center of its analytical framework. He occupied a relationship to the takeover companies giving him intimate access to concededly material information that was sedulously guarded from public access. The information, in the words of Cady, Roberts & Co., 40 S. E. C., at 912, was “intended to be available only for a corporate purpose and not for the personal benefit of anyone.” Petitioner, moreover, knew that the information was unavailable to those with whom he dealt. And he took full, virtually riskless advantage of this artificial information gap by selling the stocks shortly after each takeover bid was announced. By any reasonable definition, his trading was “inherent[ly] unfai[r].” Ibid. This misuse of confidential information was clearly placed before the jury. Petitioner’s conviction, therefore, should be upheld, and I dissent from the Court’s upsetting, that conviction.
Academic writing in recent years has distinguished between “corporate information” — information which comes from within the corporation *241and reflects on expected earnings or assets — and “market information.” See, e. g., Fleischer, Mundheim, & Murphy, Ah Initial Inquiry into the Responsibility to Disclose Market Information, 121 U. Pa. L. Rev. 798, 799 (1973). It is clear that § 10(b) and Rule 10b-5 by their terms and by their history make no such distinction. See Brudney, Insiders, Outsiders, and Informational Advantages Under the Federal Securities Laws, 93 Harv. L. Rev. 322, 329-333 (1979).
See Financial Analysts Rec., Oct. 7, 1968, pp. 3, 5 (interview with SEC General Counsel Philip A. Loomis, Jr.) (the essential characteristic of insider information is that it is “received in confidence for a purpose other than to use it for the person’s own advantage and to the disadvantage of the investing public in the market”). See also Note, The Government Insider and Rule 10b-5: A New Application for an Expanding Doctrine, 47 S. Cal. L. Rev. 1491, 1498-1502 (1974).
This interpretation of the antifraud provisions also finds support in the recently proposed Federal Securities Code prepared by the American Law Institute under the direction of Professor Louis Loss. The ALI Code would construe the antifraud provisions to cover a class of “quasi-insiders,” including a judge’s law clerk who trades on information in an unpublished opinion or a Government employee who trades on a secret report. See ALI Federal Securities Code § 1603, comment 3 (d), pp. 538-539 (Prop. Off. Draft 1978). These quasi-insiders share the characteristic that their informational advantage is obtained by conversion and not by legitimate economic activity that society seeks to encourage.
There is some language in the Court’s opinion to suggest that only “a relationship between petitioner and the sellers . . . could give rise to a duty [to disclose].” Ante, at 232. The Court’s holding, however, is much more limited, namely, that mere possession of material, nonpublic information is insufficient to create a duty to disclose or to refrain from trading. Ante, at 235. Accordingly, it is my understanding that the Court has not rejected the view, advanced above, that an absolute duty to disclose or refrain arises from the very act of misappropriating nonpublic information.
The Court fails to specify whether the obligations of a special relationship must fall directly upon the person engaging in an allegedly fraudulent transaction, or whether the derivative obligations of “tippees,” that lower courts long have recognized, are encompassed by its rule. See ants, at 230, n. 12; cf. Foremost-McKesson, Inc. v. Provident Securities Co., 423 U. S. 232, 255, n. 29 (1976).
The Court observes that several provisions of the federal securities laws limit but dp not prohibit trading by certain investors who may possess nonpublic market information. Ante, at 233-234. It also asserts that “neither the Congress nor the Commission ever has adopted a parity-of-information rule.” Ante, at 233. In my judgment, neither the observation nor the assertion undermines the interpretation of Rule 10b-5 that I support and that I have endeavored briefly to outline. The statutory provisions cited by the Court- betoken a congressional' purpose not to leave the exploitation of structural informational advantages unregulated. Letting Rule 10b-5 operate as a “catchall” to ensure that these narrow exceptions granted by Congress are not expanded by circumvention completes this statutory scheme. Furthermore, there is a significant conceptual distinction between parity of information and parity of access to material information. The latter gives free rein to certain kinds of informational advantages that the former might foreclose, such as those that result from differences in diligence or acumen. Indeed, by limiting opportunities for profit from manipulation of confidential connections or resort to stealth, equal access helps to ensure that advantages obtained by honest means reap their full reward.