Beneficial Corp. (Beneficial) (defendant) suffered severe losses, but its CEO and CFO issued false statements that the corporation’s financial problems were behind it. Robert Deutschman (plaintiff), relying on these statements, bought call options on Beneficial stock. When the true facts of Beneficial’s financial situation were revealed, Deutschman’s call options were effectively worthless. Deutschman brought a Rule 10b-5 claim against Beneficial and its CEO and CFO. The district court dismissed the claim, holding that Deutschman did not have standing to bring such a claim because he did not actually purchase any Beneficial stock, only the call options. Deutschman appealed.