herman
maclean
huddleston
argued
november
decided
january
alleging
defrauded
misrepresentations
registration
statement
prospectus
certain
securities
purchasers
securities
brought
class
action
federal
district
participants
offering
seeking
recovery
securities
exchange
act
act
makes
unlawful
person
use
manipulative
deceptive
device
contrivance
purchase
sale
security
trial
judge
instructed
jury
determine
whether
plaintiffs
proved
cause
action
preponderance
evidence
judgment
entered
basis
jury
verdict
plaintiffs
favor
appeals
held
cause
action
may
maintained
fraudulent
misrepresentations
omissions
even
case
conduct
might
also
actionable
securities
act
act
expressly
allows
purchasers
registered
security
sue
certain
enumerated
parties
play
direct
role
registered
offering
false
misleading
information
included
registration
statement
however
appeals
concluded
plaintiff
seeking
recovery
act
must
prove
case
clear
convincing
evidence
reversed
remanded
grounds
held
availability
express
remedy
act
preclude
defrauded
purchasers
registered
securities
maintaining
action
act
pp
two
provisions
involve
distinct
causes
action
intended
address
different
types
wrongdoing
plaintiff
need
show
material
misstatement
omission
registration
statement
establish
prima
facie
case
action
must
brought
purchaser
registered
security
brought
certain
parties
contrast
catchall
antifraud
provision
requires
purchaser
seller
security
order
establish
cause
action
prove
defendant
acted
scienter
pp
exempt
conduct
actionable
liability
conflict
basic
purpose
act
provide
greater
protection
purchasers
registered
securities
hardly
novel
proposition
two
acts
prohibit
conduct
cf
ernst
ernst
hochfelder
cumulative
construction
remedies
acts
also
supported
fact
congress
comprehensively
revised
securities
laws
federal
courts
consistently
recognized
implied
private
right
action
even
express
remedies
provisions
available
cumulative
construction
securities
laws
also
furthers
broad
remedial
purposes
pp
persons
seeking
recovery
need
prove
cause
action
preponderance
evidence
clear
convincing
evidence
preponderance
standard
consistently
employed
private
actions
securities
laws
cf
sec
joiner
leasing
reference
traditional
use
higher
burden
proof
civil
fraud
actions
common
law
unavailing
important
purpose
federal
securities
statutes
rectify
perceived
deficiencies
available
protections
establishing
higher
standards
conduct
securities
industry
balance
parties
interests
case
warrants
use
preponderance
standard
allows
parties
share
risk
error
roughly
equal
fashion
defendants
face
risk
opprobrium
may
result
finding
fraudulent
conduct
defrauded
investors
among
individuals
congress
sought
protect
securities
laws
prove
likely
defrauded
recover
pp
marshall
delivered
opinion
members
joined
except
powell
took
part
decision
cases
together
huddleston
et
al
herman
maclean
et
also
certiorari
james
truitt
argued
cause
herman
maclean
briefs
jack
pew
robert
jaffe
argued
cause
respondents
petitioners
brief
myer
feldman
jonathan
weisgall
robert
deitz
david
komiss
paul
gonson
argued
cause
securities
exchange
commission
amicus
curiae
brief
urging
affirmance
part
reversal
part
solicitor
general
lee
deputy
solicitor
general
shapiro
jacob
stillman
richard
fn
william
hegarty
victor
earle
iii
joseph
muccia
filed
brief
peat
marwick
mitchell
amicus
curiae
urging
reversal
briefs
amici
curiae
filed
edward
ross
charles
boand
arthur
anderson
john
warden
philip
howard
william
fitzpatrick
securities
industry
association
justice
marshall
delivered
opinion
consolidated
cases
raise
two
unresolved
questions
concerning
securities
exchange
act
act
stat
first
whether
purchasers
registered
securities
allege
defrauded
misrepresentations
registration
statement
may
maintain
action
notwithstanding
express
remedy
misstatements
omissions
registration
statements
provided
securities
act
act
stat
amended
second
question
whether
persons
seeking
recovery
must
prove
cause
action
clear
convincing
evidence
rather
preponderance
evidence
texas
international
speedway
tis
filed
registration
statement
prospectus
securities
exchange
commission
offering
total
securities
public
proceeds
sale
used
finance
construction
automobile
speedway
entire
issue
sold
offering
date
october
tis
meet
success
however
corporation
filed
petition
bankruptcy
november
plaintiffs
huddleston
bradley
instituted
class
action
district
southern
district
texas
behalf
purchasers
tis
securities
complaint
alleged
violations
act
sec
rule
promulgated
thereunder
cfr
plaintiffs
sued
participants
offering
including
accounting
firm
herman
maclean
issued
opinion
concerning
certain
financial
statements
pro
forma
balance
sheet
contained
registration
statement
prospectus
plaintiffs
claimed
defendants
engaged
fraudulent
scheme
misrepresent
conceal
material
facts
regarding
financial
condition
tis
including
costs
incurred
building
speedway
trial
district
judge
submitted
case
jury
special
interrogatories
relating
liability
judge
instructed
jury
liability
found
defendants
acted
scienter
judge
also
instructed
jury
determine
whether
plaintiffs
proved
cause
action
preponderance
evidence
jury
rendered
verdict
favor
plaintiffs
submitted
issues
judge
concluded
herman
maclean
others
violated
rule
making
fraudulent
misrepresentations
tis
registration
statement
determined
amount
damages
entered
judgment
plaintiffs
appeal
appeals
fifth
circuit
held
cause
action
may
maintained
act
fraudulent
misrepresentations
omissions
even
conduct
might
also
actionable
act
however
appeals
disagreed
district
appropriate
standard
proof
action
concluding
plaintiff
must
prove
case
clear
convincing
evidence
appeals
reversed
district
judgment
grounds
remanded
case
new
trial
granted
certiorari
consider
whether
implied
cause
action
act
lie
conduct
subject
express
civil
remedy
act
issue
previously
reserved
decide
standard
proof
applicable
actions
affirm
appeals
holding
plaintiffs
maintain
action
act
reverse
applicable
standard
proof
ii
securities
act
act
constitute
interrelated
components
federal
regulatory
scheme
governing
transactions
securities
ernst
ernst
hochfelder
acts
created
several
express
private
rights
action
one
contained
act
addition
private
actions
created
explicitly
acts
federal
courts
implied
private
remedies
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two
laws
significantly
present
purposes
private
right
action
act
rule
consistently
recognized
years
existence
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remedy
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peradventure
issue
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whether
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barred
invoking
established
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allegedly
fraudulent
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apparently
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provide
basis
damages
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act
resolution
issue
turns
fact
two
provisions
involve
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causes
action
intended
address
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types
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section
act
allows
purchasers
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security
sue
certain
enumerated
parties
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offering
false
misleading
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included
registration
statement
section
designed
assure
compliance
disclosure
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act
imposing
stringent
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parties
play
direct
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offering
plaintiff
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security
issued
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need
show
material
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establish
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liability
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security
virtually
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even
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misstatements
defendants
bear
burden
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due
diligence
see
although
limited
scope
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burden
plaintiff
contrast
catchall
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provision
requires
plaintiff
carry
heavier
burden
establish
cause
action
action
must
brought
purchaser
registered
security
must
based
misstatements
omissions
registration
statement
brought
certain
parties
action
brought
purchaser
seller
security
person
used
manipulative
deceptive
device
contrivance
connection
purchase
sale
security
emphasis
added
however
plaintiff
carries
heavier
burden
plaintiff
significantly
must
prove
defendant
acted
scienter
intent
deceive
manipulate
defraud
since
address
different
types
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see
reason
carve
exception
fraud
occurring
registration
statement
conduct
may
also
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basic
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provide
greater
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purchasers
registered
securities
anomalous
indeed
special
protection
afforded
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offering
act
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deprive
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makes
available
persons
deal
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conduct
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act
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prohibit
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naftalin
applying
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conduct
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fact
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well
overlap
neither
unusual
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quoting
sec
national
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unequivocally
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title
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consistent
line
judicial
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permitted
plaintiffs
sue
regardless
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congress
enacted
substantial
significant
revision
country
federal
securities
laws
since
passage
securities
exchange
act
see
securities
acts
amendments
pub
stat
congress
acted
federal
courts
consistently
routinely
permitted
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light
judicial
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decision
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suggests
congress
ratified
cumulative
nature
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see
merrill
lynch
pierce
fenner
smith
curran
lorillard
pons
cumulative
construction
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laws
also
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act
congress
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purpose
impose
requirements
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regulation
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makes
unlawful
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capital
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research
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superintendent
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cas
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extent
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typical
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stores
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fischman
raytheon
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bromberg
lowenfels
securities
fraud
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pp
securities
acts
amendments
hearings
subcommittee
securities
senate
committee
banking
housing
urban
affairs
conference
report
legislation
explained
amendments
culmination
searching
reexamination
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first
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nixon
recognizing
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actions
resolving
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moreover
certain
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modern
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sec
capital
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developed
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standard
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