Hertzberg v. Dignity Partners, Inc. case brief summary
191 F.3d 1076 (1999)
CASE FACTS
Plaintiffs purchased stock in defendant company more than 25 days after the initial public offering (IPO), but before the knowledge that the company was about to post huge losses became public. They sued as a class, claiming principally that defendant had violated § 11 of the Securities Act of 1933 , 15 U.S.C.S. § 77k, for failure to disclose material facts in the registration statement. The trial court dismissed the claims on the ground that because plaintiffs had not purchased the stock in the IPO, or within 25 days thereof, they lacked standing.
DISCUSSION
The appeals court reversed, holding that the 25-day limitation was not applicable and plaintiffs had standing to sue because 15 U.S.C.S. § 77k(a) provided that where a material fact is misstated or omitted from a registration statement accompanying a stock, any person acquiring such security may sue for losses caused by the misstatement or omission.
CONCLUSION
Dismissal of plaintiffs' class action securities case reversed and remanded because plaintiffs had standing to sue under statute which provided that where a material fact is misstated or omitted from a registration statement accompanying a stock, any person acquiring such security may sue for losses caused thereby.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
191 F.3d 1076 (1999)
CASE SYNOPSIS
Class action representative plaintiffs
appealed an order from the United States District Court for the
Northern District of California dismissing their securities claims
against defendant company on the ground that plaintiffs lacked
standing to bring the suit, under 15 U.S.C.S. § 77k.CASE FACTS
Plaintiffs purchased stock in defendant company more than 25 days after the initial public offering (IPO), but before the knowledge that the company was about to post huge losses became public. They sued as a class, claiming principally that defendant had violated § 11 of the Securities Act of 1933 , 15 U.S.C.S. § 77k, for failure to disclose material facts in the registration statement. The trial court dismissed the claims on the ground that because plaintiffs had not purchased the stock in the IPO, or within 25 days thereof, they lacked standing.
DISCUSSION
The appeals court reversed, holding that the 25-day limitation was not applicable and plaintiffs had standing to sue because 15 U.S.C.S. § 77k(a) provided that where a material fact is misstated or omitted from a registration statement accompanying a stock, any person acquiring such security may sue for losses caused by the misstatement or omission.
CONCLUSION
Dismissal of plaintiffs' class action securities case reversed and remanded because plaintiffs had standing to sue under statute which provided that where a material fact is misstated or omitted from a registration statement accompanying a stock, any person acquiring such security may sue for losses caused thereby.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
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