Is A Seller’s Rule 10b-5 Cause of Action Automatically Transferred to the Buyer?

Friday, January 1st, 1988 at 12:00 am by William K.S. Wang
William K.S. Wang, Is A Seller’s Rule 10b-5 Cause of Action Automatically Transferred to the Buyer?, 1988 Colum. Bus. L. Rev. 129

Suppose a securities buyer has a private cause of action under rule 10b-5 against someone who perpetrated a fraud relating to the purchase. Further assume that the buyer subsequently sells the security involved. A question arises as to whether the claim is automatically transferred to the new owner of the security. In other words, does the rule 10b-5 claim follow the security? This article makes several recommendations as to the law of automatic assignment.

Author Information

Professor, Hastings College of the Law. B.A. 1967, Amherst College; J.D. 1971, Yale Law School. This article is adapted from part of a book in progress on insider trading and federal anti-fraud regulation to be published by Little, Brown & Co.