Glamorgan Coal Corp. v. Ratner’s Group
United States District Court for the Southern District of New York
1995 WL 406167 (1995)
Ratner’s Group PLC (Ratner’s) (defendant) advertised a private offering of its stock. Ratner’s provided potential investors with a 275-page document describing its financial and managerial structure. Glamorgan Coal Corporation (Glamorgan) (plaintiff) bought over six million dollars’ worth of Ratner’s shares, but two months later, a major investment service downgraded its rating of Ratner’s, and Glamorgan suddenly found itself holding worthless paper. Glamorgan sued Ratner’s in federal court. Glamorgan claimed that the Ratner’s financials constituted a prospectus within the meaning of § 10 of the Securities Act of 1933, and that because that prospectus omitted critical information that would have deterred Glamorgan from buying the company’s stock, § 12(a)(2) of the Securities Act entitled Glamorgan to rescind its purchase and recover damages. Ratner’s moved to dismiss Glamorgan’s suit.
Rule of Law
Holding and Reasoning (Owen, J.)
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