Barnes v. Osofsky

373 F.2d 269 (1967)

From our private database of 46,000+ case briefs, written and edited by humans—never with AI.

Barnes v. Osofsky

United States Court of Appeals for the Second Circuit
373 F.2d 269 (1967)

Facts

Meyer Osofsky (defendant) was a principal shareholder, director, and officer in Aileen, Inc. (Aileen). In 1963, Aileen, through Osofsky, underwriters, and others (defendants) filed a registration statement for new stock. At the time of that filing, Aileen already had issued and registered other shares that were being publicly traded. Purchasers of Aileen stock brought class-action suits against Osofsky and others, alleging they violated § 11 of the Securities Act of 1933 because the 1963 registration statement and its related prospectus were false and misleading. Most purchasers settled the litigation. The proposed settlement, which required district-court approval, provided that only shares that actually were registered by the 1963 registration statement (newly registered shares) could be the basis for damages. That is, to recover under the proposed settlement, a purchaser would have to show that each specific share for which it sought compensation was newly registered. Two purchasers—Attilo Occhi and Ered Zilker (objectors) (plaintiffs)—objected to the settlement, arguing that the settlement should allow damages based on all shares purchased during the relevant time, not just newly registered shares. They contended that although § 11 is unclear about who may sue, § 11’s ambiguous language should be interpreted broadly because (1) the false and misleading 1963 registration statement affected the price of all Aileen shares (not just newly registered shares) and all victims should be treated equally, (2) whether or not a purchaser acquired a newly registered share was a matter of accident because most trades are effected by brokers who do not care whether a share was newly registered, and (3) it is difficult to trace the lineage of any particular share. The district court approved the settlement over the complaint of the objectors. The objectors appealed.

Rule of Law

Issue

Holding and Reasoning (Friendly, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 743,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 743,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,000 briefs, keyed to 986 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 743,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,000 briefs - keyed to 986 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership