(concurring in the opinion in part but dissenting from the judgment):
I concur with the opinion of the majority in deciding that the acts and failures to act of the Exchange were violations of its section 6(b) responsibilities under the Securities Exchange Act of 1934, 15 U.S.C. § 78f(b), which would entitle a plaintiff if injured by them to a private action for damages.1 It is clear also to me that those *180derelictions of the Exchange were a proximate cause of the loss sustained by Hughes.2 I am unable to join with the majority’s holding that Hughes is barred by the doctrine of waiver from recovering for the losses incurred as a result of a breach by the Exchange of its section 6 duty. I find this portion of the majority’s opinion analytically unsound and predicated upon a series of assumptions which do not fit the facts of this ease. Even were the facts otherwise, however, I would entertain serious doubts concerning the appropriateness of the waiver doctrine in a section 6(b) action against an exchange.
The majority’s view is that by bargaining for the lifting of restrictions which he knew had been imposed for the protection of the investing public as a condition precedent to his subordination agreement, Hughes waived his right to recover for the Exchange’s breach of duty.3 The standard of waiver the majority uses comes from Royal Air Properties, Inc. v. Smith, 333 F.2d 568 (9th Cir. 1964), where we stated at 571, quoting in part Matsuo Yoshida v. Liberty Mutual Insurance Co., 240 F.2d 824, 829 (9th Cir. 1957):
“[WJaiver is ‘the voluntary or intentional relinquishment of a known right. It emphasizes the mental attitude of the actor.’ Since waiver is a voluntary act, there must be knowledge of the right in question before the act of relinquishment can occur.”
We then went on to say:
“[WJaiver of rights under the Securities Exchange Act of 1934 should be limited to those cases where it is intended, and that therefore the right in question must be found to be actually known before waiver becomes effective.”
I would add to this legal framework the common law principal that waivers in derogation of a statutory right are not favored and will not be inferred from doubtful acts or language. Holden & Martin Lumber Co. v. Stuart, 118 Vt. 286, 108 A.2d 387, 389 (1954), Worley v. Johnson, 60 Fla. 294, 53 So. 543, 545 (1910), Colgate v. United States Leather Co., 73 N.J.Eq. 72, 67 A. 657, 663 (1907). Indeed, at common law, when the right in question was conferred for the benefit of the public at large rather than for the private benefit of individuals, courts employed a near-absolute prohibition upon the defense of waiver. See City of Glendale v. Coquat, 46 Ariz. 478, 52 P.2d 1178, 1180 (1935) and cases cited therein.
The majority relies upon the following passage from Royal Air Properties :
“The purpose of the Securities Exchange Act is to protect the innocent investor, not one who loses his innocence and then waits to see how his investment turns out before he decides to invoke the provisions of the Act.”
While Hughes may not have been a “babe in the woods,” it does not follow, as the majority assumes, that his understanding of the implications of the decision to lift the restrictions approached that of the Exchange. Indeed, the evidence indicates that his understanding of this transaction was limited both by his own lack of experience in this sophisticated area of finance and by what the Exchange did and did not tell him.
Hughes was never made fully aware of the critical situation in which Dempsey-Tegeler found itself on and before March 24, 1970, when he placed his securities with *181Dempsey-Tegeler in subordination to the claims of its creditors. For example, the problems of Dempsey-Tegeler reached back as far as 1964 and 1965 when it was determined by the Exchange that as a result of its decentralized accounting system, the firm was in violation of the Exchange’s capital and record-keeping rules. From that date until its demise, Dempsey-Tegeler never seemed to be able to completely comply with the requirements of a solvent passably-operated house.4
Mr. Tegeler was fined $10,000 on that occasion and two other voting stockholders were fined $10,000 and $2,000 each. A surprise audit in 1968 by Haskins & Sells, certified public accountants, again revealed serious capital and accounting problems in violation of Exchange rules and some sanctions were again imposed by the Stock Exchange. The audit of 1969 disclosed only a worsening situation. The Exchange conducted an analysis by its own examiners. Senior Exchange officers and Securities Exchange Act Commissioners had been meeting at intervals during the period.
Thus, as detailed by the district court, we come to the crucial period from August 1969 to March 24, 1970, when Hughes signed and sealed his fate. After the release of the audit report of 1969, the Commission and the Exchange became increasingly concerned with the Dempsey-Tegeler situation. Their disciplinary efforts had not been successful. A meeting was held on September 25,1969, between representatives of the Commission, officers of the Exchange and officials of Dempsey-Tegeler. The gravity of the situation was reviewed but no action was taken except to keep a close watch on developments. During a second meeting between Exchange and Commission officials, strong disagreement occurred over the question of shutting Dempsey-Tegeler down and the appointment of a receiver. The Exchange opposed such action and it was not taken. On December 11, 1969, another meeting concerning the Dempsey-Tegeler problem was held. At this meeting, as the district court noted:
“. . . the project to raise subordinated capital for Dempsey was mentioned in the context of the Exchange’s suggestion that the Commission refrain from taking any action lest efforts to solve the capital deficiency problem be thwarted.”
Hughes’ meetings with Dempsey-Tegeler were proceeding during approximately the same period. As the majority points out, Walraven and Whitney, both Dempsey-Tegeler officials and confidants of Hughes, advised Hughes at the first meeting not to commit himself unless King subordinated his stock. The second meeting occurred in February 1970, at which time a subordination agreement similar to the one being proposed to King was also submitted to Hughes. As appears from the trial court’s opinion, the hard facts were not laid out before Hughes. He was told that there were problems of record-keeping but that Dempsey-Tegeler was doing a big volume of business and that it was a “viable corporation.”
As pointed out by the trial court5 the restrictions were mentioned, but explained away by saying that the reduction of offices was to streamline operations and that Dempsey-Tegeler was “doing more business than they had capital to back up,” and that this was the reason for needing the subordinated capital from Hughes and King. Hughes was thus given a small pill with a large sugar coating.
*182The third meeting between Hughes, Walraven and Whitney took place on March 23, 1970. Mr. Robert Peck, an accountant and vice-president of Dempsey-Tegeler, who had been employed to help solve the problems of the company, was also present. At this time there was plain talk by Peck, who told Hughes outright that there was a “good chance” that he might lose his money if he subordinated his securities. He presented Hughes with documents containing detailed financial data which he explained and which if understood and believed would constitute a clear warning of the great risk Hughes was taking. At the same meeting, Walraven and Whitney represented to Hughes that the proposed subordination was a good idea and that there was little risk of loss. As the trial court related, Walraven and Whitney told Hughes that “as long-standing friends and trustworthy business advisors they would not suggest subordination to him if they seriously believed that he would suffer losses as a result.” Their approach was to counteract the very negative presentation made by Peck. The district court concluded after listening to the evidence of what transpired at this meeting that Hughes “. . . simply followed the advice which he wanted to hear. And, he wanted to believe that subordination would be fruitful, and not based upon a substantial risk.” Hughes took the documents with him and on the next day, March 24, 1970, signed the subordination agreement and collateral papers submitted for his signature, without change or modification.6
The district court described Hughes as a man:
“. . . gifted with an uncommon ability to nurture and manage business-enterprises; however, he was neither principally an investor of stocks, nor was he a trained and experienced accountant, knowledgeable in the finer details of data interpretation.”
Even an experienced trader might not have understood the intricacies of the regulatory scheme of the Securities Exchange Act of 1934 and the Rules of the New York Stock Exchange. More to the point, it is highly unlikely that Hughes would have realized the significance of the violations of Rule 417, 325, 440 and 342 of the Exchange with which Dempsey-Tegeler was charged. No evidence indicates that he did.
Hughes was not shown to have any knowledge of the history or details of the meetings between the Commission, the Exchange and Dempsey-Tegeler concerning the activities of Dempsey-Tegeler which created a violation of section 6(b), or of the extent of the violation by Dempsey-Tegeler of the rules of the Exchange, including the devastating report of October 22, 1969.7 Nor was he shown to have any understanding of the laws and regulations by which the exchanges should be controlled and in turn regulate their own business. At the December 11,1969, meeting between officials of the Commission, the Exchange and Dempsey-Tegeler, the Exchange suggested that no action be taken by the Commission lest the efforts of the Exchange to *183obtain subordinated capital be undermined. This was a bald recognition that the whole unvarnished truth would upset Mr. Hughes and the Dempsey-Tegeler rescue operation.
All of this may suffice to show that while Mr. Hughes was an outstanding businessman in his own field, in this particular transaction, pressured by friends desperate to have his financial support, he was far from the sophisticated investor the majority assumes. For all these reasons, Hughes was not in a position to understand the full implications of the decision to lift the sanctions. I therefore would attach little significance to his insistence that the sanctions be lifted as a prerequisite to executing the subordination agreement.
Moreover, in grasping onto this bit of bargaining by Hughes as a justification for applying the waiver doctrine, the majority makes further unwarranted assumptions. Admittedly Hughes’ motivation for insistence that the sanctions be lifted prior to the execution of the subordination agreement was self-interest. I don’t think it follows, however, that when an investor bargains out of self-interest with an Exchange charged with a statutory duty of protecting the investing public, he forfeits his right to rely upon the Exchange’s expertise and judgment. Bargaining for one’s advantage is not tantamount in this instance to bargaining for an abandonment of a statutory duty.
The lifting of the restrictions was only the tip of the iceberg. They were imposed in the hope that Dempsey-Tegeler’s underlying problem of impaired capital and questionable solvency would thereby be improved if not remedied. But neither the Exchange nor Dempsey-Tegeler nor the Commission was at all certain that the remedy would be effective. Hughes was encouraged to request that the restrictions on Dempsey-Tegeler be lifted, not by any basic understanding of the problem on his part, but at the strong suggestion of his friends at Dempsey-Tegeler who were eager to have their organization off and running again.
In arriving at the conclusion that he would execute the subordination agreement only if the Exchange would first agree to lift its sanctions, Hughes was entitled to assume, it seems to me, that investor welfare would be among the foremost considerations of the Exchange in making its decision. If he was not entitled to make this assumption, the self-regulation rationale of the 1934 Act is gravely undermined.
This, then, leads me to the last of my difficulties with the application of the waiver doctrine here. The Royal Air Properties case makes clear that “waiver of rights under the Securities Exchange Act of 1934 should be limited to those cases where it is intended.” 333 F.2d at 571. The majority obviously assumes that the waiver defense was intended to apply in an action against an exchange brought under section 6 of the Act, although no court has ever so held. I have grave doubts as to whether this assumption is warranted.
The Securities and Exchange Act was enacted only after a Congressional determination that exchanges were incapable of curbing the abuses in the securities industry which had led to mishandling of investors’ funds, wild speculation and general economic chaos after the Great Depression without some degree of government regulation. Dawidoff, The Power of the Securities and Exchange Commission to Require Stock Exchanges to Discipline Members, 41 Ford.L. Rev. 549, 551 (1973). Prior to this time, the exchanges were regarded as private clubs and were given great latitude by the court in disciplining errant members. As the Supreme Court noted in Silver v. New York Stock Exchange, 373 U.S. 341, 351, 83 S.Ct. 1246, 1253, 10 L.Ed.2d 389, 396 (1963): *184It is thus clear that while Congress intended to retain the general principle of self-regulation in the 1934 Act, that principle was to be limited severely. In the colorful language of Mr. Justice Douglas, then Chairman of the SEC, “Government would keep the shotgun, so to speak, behind the door, loaded, well oiled, cleaned, ready for use but with the hope it would never have to be used.” Douglas, Democracy and Finance (Allen ed. 1940) 82, quoted in Silver, supra, at 352, 83 S.Ct. at 1254, 10 L.Ed.2d at 397. The Congressional mandate is explicit, it seems to me, that the self-interest of the exchanges was not to be placed above their duty of effective self-regulation. To allow an exchange to sidestep liability by use of the waiver doctrine here thwarts the purpose of section 6 and takes us a step backward toward the private club environment which the 1934 Act sought to eradicate.
*183“As exchanges became a more and more important element in our Nation’s economic and financial system, however, the private-club analogy became increasingly inapposite and the ungoverned self-regulation became more and more obviously inadequate, with acceleratingly grave consequences. This impotency ultimately led to the enactment of the 1934 Act.”
*184In this regard, I also note that there is a clear trend in the law today to limit severely, if not abolish altogether, traditional common law defenses in securities and antitrust actions, where considerations of public policy often outweigh whatever balance in equities the court finds between the individual litigants. Perma-Life Mufflers v. International Parts Corp., 392 U.S. 134, 138, 88 S.Ct. 1981, 1984, 20 L.Ed.2d 982, 989 (1968). As City of Glendale v. Coquat, supra, indicates, this trend is not a dramatic departure from established common law principles.
In the securities area, cases frowning upon the use of common law defenses have involved actions against brokers rather than an exchange. E. g., Pearlstein v. Scudder & German, 429 F.2d 1136, 1141 (2d Cir. 1970), Avery v. Merrill Lynch, Pierce, Fenner & Smith, 328 F.Supp. 677, 680 (D.D.C.1971), Nathanson v. Weis, Viosin, Cannon, Inc., 325 F.Supp. 50, 55-57 (S.D.N.Y.1971). The common rationale has been that Congress, in permitting brokers to enjoy a privileged and anti-competitive position in the securities industry structure, has imposed upon them statutory responsibilities and charged them with an intimate knowledge of the industry which an individual investor is unlikely to achieve. If a limitation upon common law defenses available to a broker might in some instances allow an unscrupulous investor to recover, this consequence is balanced by the salutary effect which the threat of private suits can have in maintaining adherence to statutory commands. These suits are, in effect, an alternative to more direct government intervention — they help to keep the government’s shotgun “behind the door,” to paraphrase Mr. Justice Douglas. Availability of common law defenses, such as in pari delicto, assumption of risk, equitable estoppel, and waiver serve to make this check upon abuses in the system’s internal workings considerably less potent.
I find many of the same self-policing considerations at work when the action is directed toward an exchange rather than a broker. Even though the exchanges are only one step removed from the Securities Exchange Commission, and therefore more susceptible to direct government oversight, the unhappy facts of this case indicate that this proximity does not always assure smooth self-regulation. The information and expertise of the exchanges is also unlikely to be shared by the individual investor. Moreover, the responsibilities of the exchange emanate almost entirely from statute. Whereas a 10b-5 action against a seller of securities is in many senses analogous to a common law action for fraud, a cause of action against an exchange for a breach of statutory duty bears little resemblance to a common law action. For this reason, traditional common law defenses may be even less appropriate where the exchange is the defendant. Therefore, I think a public purpose might be served by eliminating the defense of waiver altogether from section 6 actions against an exchange.
Whether Congress intended to allow for a defense of waiver in an action against an exchange or whether the defense might otherwise be appropriate in section 6 actions are close legal questions. The majority assumes without discussion that the answer to both questions is yes. I have my doubts.
*185I would be more disposed to go along with the majority and resolve these doubts in favor of this Exchange had it been candid with Hughes. It just was not. It had a duty to be so. It rather attempted to get by with a partial and very minimal disclosure and insist upon Hughes signing a hold-harmless agreement to protect the Exchange against future liability. The hold-harmless letter submitted to Hughes to sign was obviously not a document drawn by the Exchange for the protection of the investor as would seem to be the appropriate role of the Exchange here. It was plainly and simply for the protection of the Exchange against action permitted by it which by implication it recognized might subject the investor to loss and it to litigation. This was not what Congress had in mind when it imposed upon the Securities and Exchange Commission a duty of regulation of exchanges and the Exchange imposed a duty of quality operation upon its members. It is the Exchange which must make the hard decisions. It has the facts and the expertise. If it chooses to risk half-way measures and encourage investments by half-informed investors, it should be held to shoulder the result if loss occurs.
I would therefore reverse and remand with directions to enter judgment against the New York Stock Exchange.
There remains the question of the disposition of the claims against Whitney and Dempsey-Tegeler.8 It appears clear that upon these facts both Whitney and Dempsey-Tegeler are liable under the provisions of section 12(2) of the Securities Act of 1933,15 U.S.C. § 771 and of section 10(b) of the 1934 Act, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. 240.10b-5, promulgated thereunder.
Rule 10b-5 provides:
“It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
“(1) to employ any device, scheme, or artifice to defraud,
“(2) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
“(3) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the purchase or sale of any security.”
The misrepresentations of Whitney and Walraven at the meeting with Peck were particularly insidious in defeating the analysis of the expert called in for the purpose of establishing a record of disclosure. Their participation throughout was an exercise in conflict of interest with representation on the one hand and misrepresentation on the other. For the same reasons, Dempsey-Tegeler, as the principal on whose behalf Whitney and Walraven were acting, is equally responsible. The basic misrepresentation throughout was that Dempsey-Tegeler was fundamentally sound financially and that with the participation of King the contribution of Hughes would make the future secure for Dempsey-Tegeler. Nothing could have been farther from the truth.
I would therefore also reverse and remand with directions to enter judgment against Dempsey-Tegeler & Co., Inc. and Lewis Whitney.
. The Securities Exchange Act of 1934, 15 U.S.C. § 78f(b), indicates a clear intention to protect persons dealing through member brokers by providing for their suspension and expulsion. Such intent is cemented by section 6(d) which provides:
“(d) If it appears to the Commission that the exchange applying for registration is so organized as to be able to comply with the provisions of this title and the rules and regulations thereunder and that the rules of the exchange are just and adequate to insure fair dealing and to protect investors, the Commission shall cause such exchange to be registered as a national securities exchange.” Section 27 of the Securities Exchange Act of
1934, 15 U.S.C. § 78aa follows with a jurisdictional statement that
“The district courts of the United States . shall have exclusive jurisdiction of violations of this title or the rules and regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by this title or the rules and regulations thereunder . . . . ”
Although J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964), was an action by a stockholder against the corporation based upon section 14(a) of the Act, the rationale of the Court would appear to sanction the use of section 27 to enable the courts “to grant all necessary remedial relief.” 377 U.S. at 435, 84 S.Ct. at 1561, 12 L.Ed.2d at 429. See also Baird v. Franklin, 141 F.2d 238 (2d Cir.), cert. denied, 323 U.S. 373, 65 S.Ct. 38, 89 L.Ed. 591 *180(1944); Rich v. New York Stock Exchange, 379 F.Supp. 1122 (S.D.N.Y.1974); Kroese v. New York Stock Exchange, 227 F.Supp. 519 (S.D.N.Y.1964).
. Although the majority does not discuss causation directly it is implicit from its denial of recovery on the basis of an affirmative defense. Lest there be any doubt, I would find that Hughes’ loss is directly attributable to the failure of the Exchange to perform its statutory duty of regulation.
. I concur in and wish to re-emphasize what the majority points out at footnote 13, that a theory of waiver cannot be built around the “knowledgeability letter” which Hughes signed. I am in complete agreement with the majority that this disclaimer or waiver runs afoul of section 29(a) of the Act, 15 U.S.C. § 78cc(a).
. Report of October 22, 1969, Exhibit 33.
. “Briefly, the January 29, 1970 memorandum . . . showed that the liquidation of Dempsey’s securities positions and the delivery of Dempsey’s customer accounts was ‘proceeding slowly’, that no progress had been made in the planned registration of Si-boney stock and that Dempsey’s efforts to reduce its fail difference account had ‘succeeded only in increasing differences In addition, the memorandum noted that Dempsey was in ‘a cash pinch’ which was delaying the liquidation of securities positions. . . . This report corroborated the then opinion of the SEC staff that Dempsey was running out of cash . . . Appellant’s Opening Brief at 22 n.16.
. King had executed a subordination agreement on March 19, 1970, a fact made known to Hughes. The papers included the hold-harmless letter which the Exchange required Hughes to sign.
. This report to the Board of Governors of the Exchange from the Department of Member Firms, Dempsey-Tegeler & Co., Inc. and Jerome F. Tegeler incorporated an earlier report of a similar memorandum as of April 15, 1969, which found violations of Rules 417 and 419; 325; 440; 421.50; 342 and 402(a) and imposed a fine of not more than $100,000 on the firm, not more than $50,000 on Tegeler and not more than $5,000 on Albert Gurmmersbach, a Senior Vice President.
The October 1969 report found additional rules violations including Rule 325 (capital violation); 440 (failure to maintain accurate books and records); Rule 417 (failing to keep books and records sufficient to disclose its financial condition); Rule 402(a) (failing to segregate its customers fully paid securities); and Rule 342 (failing to maintain adequate supervision and control). It also charged failure to comply with the requirements of the report of April 15. Jerome F. Tegeler admitted the charges in writing and consented to a one-year suspension as an allied member of the New York Stock Exchange.
. Hughes’ claims against Walraven were dismissed during trial.