421 U.S. 723 (1975)
As part of an antitrust consent decree, petitioner corporation was required to offer shares of common stock to a group of retailers, which included respondent. Respondent did not purchase any stock, but later sued the corporation and its shareholders under § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, 17 C.F.R. § 240.10b-5, alleging it had not purchased stock due to a prospectus that was misleading as it was overly pessimistic regarding the corporation's status. The district court dismissed respondent's complaint, which the court of appeals reversed.
- The court reversed and concluded respondent was not entitled to sue for a violation of Rule 10b-5, and held that a plaintiff class, for purposes of a private action under § 10(b) and Rule 10b-5, was limited to actual purchasers and sellers of securities.
- Moreover, the court declined to create an exception to that rule, as the court of appeals had, that would permit an offeree of securities pursuant to a consent decree, such as respondent, to sue under Rule 10b-5 regardless of whether it had purchased securities, at least in the absence of a contractual right or duty to purchase.
The court reversed.
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