A.C. Frost & Co. v. Coeur d'Alene Mines Co

In A.C. Frost & Co. v. Coeur d'Alene Mines Co., 312 U.S. 38, 61 S.Ct. 414, 85 L.Ed. 500 (1941), a purchaser of unregistered shares of stock sought to enforce a contract of sale through application of statutory sanctions pursuant to the Securities Exchange Act. The Supreme Court rejected the issuer's defense that the contract be found null and void due to the unlawful misconduct of both parties in negotiating an illegal contract, stating that to deny relief because of the illegality would "seriously hinder rather than aid the real purpose of the statute." Id. at 43, 61 S.Ct. at 417. Thus, enforcement of the contract was permitted because denial would have encouraged violation of the act and would have defeated its intent.