SEC v Purina

SEC v. Purina

Facts: Purina sold 2 mill in stock to its employees. It wanted this offering to be considered a private offering so that it did not have to be registered.

Holding: not private

Reasoning: The focus of the inquiry should be on the need of the offerees for the protections afforded by registration. The employees here were not shown to have acess to the kind of information which registration would disclose. they were therefore not sophisticated in the way that teh securities regulations mandate because they were created to protect helpless investors.

Why is this a sea change case?
-before this, it was very strictly numbers based, if 35 or less, its private
-here the court is switching the inquiry to sophistication
-from quantity to quantity of offeerees to quality of oferees
-if the peple can “fend for themselves”

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Page last modified on Wednesday 06 of May, 2009 17:23:26 GMT by bohen.
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