Brief Fact Summary. In reassessing a Â§ 11 claim, the district court dismissed the claim for lack of standing.
Synopsis of Rule of Law. Standing is not conditioned upon privity under Â§ 11 of the Securities Act.
Section 12 permits suit against a seller of a security by prospectus only by the person purchasing such security from him, thus specifying that a plaintiff must have purchased the security directly from the issuer of the prospectus.View Full Point of Law
Issue. How does one achieve standing when filing a Â§ 11 claim?
Held. (Fletcher, J.) â€œAny person acquiring [a] securityâ€ under a registration statement withabsentor distorted datamay bring an action for losses caused by the distortion or absence. In this case, it is immaterialthat the investors failed to buy Dignity stock within 25 days or in the initial IPO. Reversed and Remanded.
Discussion. Discouraging corporations from dispensing substandard registration statements is a primary goal of the extensive standing requirements.