Securities and Exchange Commission v. Manor Nursing Centers, Inc.

458 F.2d 1082 (1972)

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Securities and Exchange Commission v. Manor Nursing Centers, Inc.

United States Court of Appeals for the Second Circuit
458 F.2d 1082 (1972)

Facts

Manor Nursing Centers, Inc. (defendant) offered 450,000 shares for sale to investors on an “all or nothing” basis. If all 450,000 shares were not sold by March 8, 1970, the shares would not be sold and the investors’ money would be returned. When the deadline passed, Manor had not sold all 450,000 shares, but did not return the investors’ money. The Securities and Exchange Commission (plaintiff) then brought suit against Manor for violating the prospectus requirement of § 10(a) of the Securities Act of 1933. The district court ruled in favor of the SEC. Manor contends that circumstances changed after issuing the prospectus, leading them to keep the funds in question. As a result, it appealed to the Second Circuit Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Timbers, J.)

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