Through a complex series of transactions, Begole (defendant) used the assets of Manhattan Casualty Co. (Manhattan) to purchase all of Manhattan’s stock from Bankers Life & Casualty Co. (defendant). Begole and an accomplice arranged for a $5 million loan which they used to purchase the stock. They then caused Manhattan to sell all its U.S. Treasury bonds for roughly $5 million and used that amount to repay the lender. Manhattan, represented by New York’s Superintendent of Insurance (plaintiff), sued numerous parties, alleging that Manhattan was defrauded in connection with the sale of securities in violation of § 10b of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The trial court granted the defendants’ motion to dismiss. The appellate court affirmed, holding that since no investor was injured and since the securities market was untainted, no remedy was available under Rule 10b-5. The Superintendent of Insurance appealed to the United States Supreme Court.