gustafson
alloyd
argued
november
decided
february
petitioners
collectively
gustafson
sole
shareholders
alloyd
sold
substantially
stock
respondents
buyers
private
sale
agreement
purchase
price
included
payment
reflecting
estimated
increase
company
net
worth
end
previous
year
closing
since
hard
financial
data
unavailable
contract
provided
audit
financial
statements
revealed
variances
estimated
actual
increased
value
disappointed
party
receive
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result
audit
respondents
entitled
recover
adjustment
instead
sought
relief
securities
act
act
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gives
buyers
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right
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sellers
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omissions
means
prospectus
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gustafson
motion
summary
judgment
district
held
claims
arise
initial
stock
offerings
private
sale
agreement
appeals
vacated
judgment
remanded
case
light
intervening
decision
inclusion
term
communication
act
definition
prospectus
meant
latter
includes
written
communications
offering
security
sale
thus
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sale
agreements
held
section
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sale
contract
since
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recitations
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public
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term
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act
pp
assumptions
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gustafson
misstatements
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means
prospectus
oral
page
ii
communication
related
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three
sections
act
critical
resolving
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whether
contract
prospectus
defines
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notice
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communication
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radio
television
offers
security
sale
confirms
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specifies
information
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term
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pp
contract
case
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contained
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statement
large
public
offerings
issuer
controlling
shareholders
requires
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statement
thus
follows
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offerings
since
dispute
contract
question
required
carry
information
contained
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statement
also
follows
contract
prospectus
pp
term
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communications
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construction
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parts
act
intended
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applies
act
structure
language
reinforce
view
addition
since
primary
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creation
federal
duties
part
registration
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connection
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offerings
reasonable
conclude
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rather
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meaning
pp
term
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definition
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purposes
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one
word
list
read
entirety
yields
interpretation
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refers
document
soliciting
public
acquire
securities
respondents
argument
contrary
inconsistent
two
rules
statutory
construction
first
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words
altogether
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reading
communication
include
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known
company
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terms
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list
page
iii
apparent
communication
refers
documents
wide
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includes
radio
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communications
telephone
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time
act
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term
art
understood
refer
document
soliciting
public
acquire
securities
pp
holding
case
draws
support
decision
naftalin
makes
unlawful
fraudulent
transfers
securities
extends
beyond
regulation
public
offerings
decision
based
language
suggested
limitation
scope
liability
legislative
history
showed
congress
made
deliberate
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act
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scheme
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coverage
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offerings
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history
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coverage
act
legislative
history
clearly
indicates
congress
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apply
public
offerings
issuer
controlling
shareholder
nothing
history
suggests
congress
intended
create
formal
prospectus
required
comply
second
less
formal
prospectus
applicable
pp
kennedy
delivered
opinion
rehnquist
stevens
souter
joined
thomas
filed
dissenting
opinion
scalia
ginsburg
breyer
joined
ginsburg
filed
dissenting
opinion
breyer
joined
gustafson
alloyd
justice
kennedy
delivered
opinion
securities
act
buyers
express
cause
action
rescission
sellers
make
material
misstatements
omissions
means
prospectus
question
presented
whether
right
rescission
extends
private
secondary
transaction
theory
recitations
purchase
agreement
part
prospectus
gustafson
alloyd
preparation
negotiating
contract
gustafson
wind
point
undertook
extensive
analysis
company
relying
part
formal
business
review
prepared
kpmg
alloyd
practice
take
inventory
year
end
wind
point
kpmg
considered
taking
earlier
inventory
use
determining
purchase
price
end
relying
instead
certain
estimates
including
provisions
adjustments
transaction
closed
december
gustafson
alloyd
holdings
executed
contract
sale
alloyd
holdings
agreed
pay
gustafson
coshareholders
sale
stock
plus
payment
reflected
estimated
increase
alloyd
net
worth
end
previous
year
last
period
hard
financial
data
available
article
iv
purchase
agreement
entitled
representations
warranties
sellers
included
assurances
company
financial
statements
present
fairly
company
financial
condition
date
latest
balance
sheet
date
agreement
executed
ha
material
adverse
change
alloyd
financial
condition
app
contract
also
provided
audit
financial
statements
revealed
variance
estimated
actual
increased
value
disappointed
party
receive
adjustment
audit
alloyd
revealed
alloyd
actual
earnings
lower
estimates
relied
upon
parties
negotiating
adjustment
amount
contract
buyers
right
recover
adjustment
amount
sellers
nevertheless
february
newly
formed
company
called
alloyd
original
company
wind
point
brought
suit
district
northern
district
illinois
seeking
outright
rescission
gustafson
alloyd
contract
securities
act
alloyd
new
company
claimed
statements
made
gustafson
coshareholders
regarding
financial
data
company
inaccurate
rendering
untrue
representations
warranties
contained
contract
buyers
alleged
contract
sale
prospectus
misstatements
contained
agreement
gave
rise
liability
act
pursuant
adjustment
clause
defendants
remitted
purchasers
plus
interest
adjustment
cause
purchasers
drop
lawsuit
relying
decision
appeals
third
circuit
ballay
legg
mason
wood
walker
district
granted
gustafson
motion
summary
judgment
holding
section
claims
arise
initial
stock
offerings
app
although
sellers
controlling
shareholders
original
company
district
concluded
private
sale
agreement
compared
initial
offering
purchasers
case
direct
access
financial
company
documents
opportunity
inspect
seller
property
review
appeals
seventh
circuit
vacated
district
judgment
remanded
consideration
light
intervening
decision
pacific
dunlop
holdings
allen
pacific
dunlop
reasoned
inclusion
term
communication
act
definition
prospectus
meant
term
prospectus
defined
broadly
include
written
communications
offered
sale
security
rejecting
view
appeals
third
circuit
ballay
appeals
decided
gustafson
alloyd
right
action
rescission
applies
communication
offers
security
sale
including
stock
purchase
agreement
present
case
granted
certiorari
resolve
circuit
conflict
reverse
ii
offers
sells
security
whether
exempted
provisions
section
title
paragraph
subsection
said
section
use
means
instruments
transportation
communication
interstate
commerce
mails
means
prospectus
oral
communication
includes
untrue
statement
material
fact
omits
state
material
fact
necessary
order
make
statements
light
circumstances
made
misleading
purchaser
knowing
untruth
omission
shall
sustain
burden
proof
know
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reasonable
care
known
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omission
shall
liable
person
purchasing
security
may
sue
either
law
equity
competent
jurisdiction
recover
consideration
paid
security
interest
thereon
less
amount
income
received
thereon
upon
tender
security
damages
longer
owns
security
gustafson
alloyd
alloyd
argues
prospectus
defined
broad
manner
broad
enough
encompass
contract
parties
argument
echoed
dissents
see
post
thomas
dissenting
post
ginsburg
dissenting
gustafson
contrast
maintains
prospectus
act
means
communication
soliciting
public
purchase
securities
issuer
brief
petitioners
three
sections
act
critical
resolving
definitional
question
case
turns
defines
prospectus
sets
forth
information
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imposes
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based
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prospectus
seeking
interpret
term
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adopt
premise
term
construed
possible
give
consistent
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throughout
act
principle
follows
duty
construe
statutes
isolated
provisions
see
philbrook
glodgett
kokoszka
belford
gustafson
alloyd
except
extent
otherwise
permitted
required
pursuant
subsection
subsections
section
prospectus
relating
security
security
issued
foreign
government
political
subdivision
thereof
shall
contain
information
contained
registration
statement
prospectus
relating
security
issued
foreign
government
political
subdivision
thereof
shall
contain
information
contained
registration
statement
although
define
prospectus
instruct
us
prospectus
act
interpreted
symmetrical
coherent
regulatory
scheme
one
operative
words
consistent
meaning
throughout
dispute
contract
case
required
contain
information
contained
registration
statement
statutory
exemption
required
take
document
coverage
cf
follows
contract
prospectus
mean
document
ceases
prospectus
whenever
omits
required
piece
information
mean
document
prospectus
within
meaning
section
absent
exemption
need
comply
requirements
first
place
gustafson
alloyd
examination
reveals
whatever
else
prospectus
may
mean
term
confined
document
absent
overriding
exemption
must
include
information
contained
registration
statement
large
public
offerings
issuer
security
controlling
shareholders
issuer
require
preparation
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statements
see
follows
conclude
prospectus
confined
documents
related
public
offerings
issuer
controlling
shareholders
much
meaning
prospectus
seems
dispute
courts
disagreement
implications
proposition
entirety
act
particular
compare
ballay
legg
mason
wood
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suggesting
term
prospectus
used
consistent
manner
pacific
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allen
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term
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dissent
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ginsburg
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make
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definitional
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see
post
ginsburg
dissenting
instead
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guidance
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term
consistent
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throughout
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read
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last
term
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department
revenue
oregon
acf
industries
slip
internal
quotation
marks
citations
omitted
see
also
brooke
group
brown
williamson
tobacco
slip
gustafson
alloyd
atlantic
cleaners
dryers
principle
applies
contract
us
prospectus
purposes
must
concede
prospectus
purposes
either
conclusion
prospectus
meaning
refers
types
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public
offers
issuer
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shareholders
reinforced
examination
structure
act
sections
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together
require
seller
file
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certain
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types
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public
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issuer
underwriter
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sections
act
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forth
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contains
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terms
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coverage
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misstatements
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written
communication
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including
secondary
market
transactions
ready
explanation
exempting
securities
gustafson
alloyd
reach
right
rescind
granted
congress
grant
immunity
private
seller
liability
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suit
reason
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term
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primary
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creation
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see
ernst
ernst
hochfelder
act
designed
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investors
full
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material
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offerings
blue
chip
stamps
manor
drug
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act
far
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statute
securities
exchange
act
act
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disclosure
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connection
offerings
securities
primarily
initial
distributions
newly
issued
stock
corporate
issuers
naftalin
act
primarily
concerned
regulation
new
offerings
sec
ralston
purina
bill
affect
transactions
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need
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protection
order
prevent
recurrences
demonstrated
abuses
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act
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purpose
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alloyd
remedies
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obligations
created
indeed
statutory
neighbors
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remedy
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new
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term
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alloyd
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black
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ed
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gustafson
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