Pinter v. Dahl case brief summary
486 U.S. 622 (1988)
CASE FACTS
The controversy arose out of the sale prior to 1982 of unregistered securities by petitioner to respondent investors. When the subject venture failed, respondents brought suit against petitioner, seeking recission under § 12(1) of the Securities Act, 15 U.S.C.S. § 771(1), for the unlawful sale of unregistered securities. Petitioner counterclaimed, alleging that respondents' suit was barred by the doctrine of in pari delicto. The lower court granted judgment for respondents and held that the doctrine of in pari delicto was inapplicable in an action under § 12(1) and that respondent was not considered a seller within the meaning of § 12(1).
DISCUSSION
CONCLUSION
The Court vacated and held that the defense of in pari delicto was available and that one was not required to confer a benefit on oneself or a third party to qualify as a seller of securities. The Court also remanded for a determination of whether respondent bore substantially equal responsibility for the failure to register and distribute the securities and whether respondent was primarily a promoter of the offering.
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
486 U.S. 622 (1988)
CASE SYNOPSIS
Petitioner challenged the judgment of
the United States Court of Appeals for the Fifth Circuit, which held
that the doctrine of in pari delicto was inapplicable to actions
under § 12(1) of the Securities Act, 15 U.S.C.S. §
771(1), and that respondent was not considered a seller within the
meaning of § 12(1).CASE FACTS
The controversy arose out of the sale prior to 1982 of unregistered securities by petitioner to respondent investors. When the subject venture failed, respondents brought suit against petitioner, seeking recission under § 12(1) of the Securities Act, 15 U.S.C.S. § 771(1), for the unlawful sale of unregistered securities. Petitioner counterclaimed, alleging that respondents' suit was barred by the doctrine of in pari delicto. The lower court granted judgment for respondents and held that the doctrine of in pari delicto was inapplicable in an action under § 12(1) and that respondent was not considered a seller within the meaning of § 12(1).
DISCUSSION
- The Court reversed and held that the common-law in pari delicto defense was available in a private action brought under § 12(1).
- Moreover, the Court held that one did not have to confer a benefit on himself or on a third party in order to qualify as a seller within the meaning of § 12(1).
- Thus, the Court remanded for a determination of whether respondent bore substantially equal responsibility for the failure to register and distribute the securities and whether respondent was primarily a promoter of the offering.
CONCLUSION
The Court vacated and held that the defense of in pari delicto was available and that one was not required to confer a benefit on oneself or a third party to qualify as a seller of securities. The Court also remanded for a determination of whether respondent bore substantially equal responsibility for the failure to register and distribute the securities and whether respondent was primarily a promoter of the offering.
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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