Maurice Dahl (plaintiff) invested $20,000 with B.J. Pinter (defendant), the owner of an oil and gas company, to acquire oil and gas leases. Pinter located leases for Dahl, and Dahl eventually invested $310,000 in various leasehold properties. Dahl then proceeded to encourage his friends and family members to also invest with Pinter. Many of Dahl’s friends and family members also invested and received unregistered oil-and-gas interests in return. When Pinter failed to drill for oil successfully, Dahl and the other investors brought suit against Pinter, alleging that Pinter unlawfully sold them unregistered securities. The investors sought rescission of their subscription agreements with Pinter under Section 12(1) of the Securities Act. Pinter filed a counterclaim against Dahl, alleging that Dahl fraudulently induced Pinter to issue unregistered securities to other investors. Pinter also raised an in pari delicto defense to Dahl's claims, asserting that Dahl's own wrongful conduct should bar his recovery. The district court held a bench trial and ultimately found in favor of Dahl and the other investors. The Fifth Circuit affirmed, holding that the in pari delicto defense was unavailable and that Dahl was not a seller of Pinter's securities for purposes under Section 12(1). The United States Supreme Court granted Pinter's petition for certiorari.