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In Paul F. Newton & Co. v. Texas Commerce Bank, the U.S. Court of Appeals for the Fifth Circuit held that the provision of the Securities Exchange Act of 1934 that provides for secondary liability' does not exclude the application of common law agency principles in an action seeking to hold a brokerage firm liable for alleged violations of the Act committed by its employee. Significantly, the brokerage firm was held liable despite the lower court's finding that the fraudulent acts were committed without the participation or knowledge of the firm or any of its officers.