Gould v. Ruefenacht et al (471 U.S. 701)
U.S. Supreme Court · decided May 28, 1985 · Supreme Court Database (Spaeth)
- Citation
- 471 U.S. 701 · 105 S. Ct. 2308
- Decided
- May 28, 1985
- Term
- October Term 1984
- Vote
- 8–1
- Majority author
- Justice Powell
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Powell delivered the opinion of the Court. This case presents the question whether the sale of 50% of the stock of a company is a securities transaction subject to the antifraud provisions of the federal securities laws (the Acts). I In 1980, respondent Ruefenacht (hereafter respondent) purchased 2,500 shares of the stock of Continental Import & Export, Inc., an importer of wine and spirits, from Joachim Birkle. Birkle was Continental’s president and had owned 100% of the company’s stock prior to the time of the sale. The 2,500 shares, for which respondent paid $250,000, represented 50% of Continental’s outstanding stock. According to respondent, he purchased the stock in reliance on financial documents and oral representations made by Birkle; Christopher O’Halloran, a certified public accountant; and petitioner Gould, Continental’s corporate counsel. Part of the consideration for the deal was a promise by respondent that he would participate in the firm’s management. The record reveals that he helped solicit contracts for the firm, participated in some hiring decisions, signed a banking resolution so that he could endorse corporate checks in Birkle’s absence, and engaged in other more minor pursuits. All the while, however, respondent remained a full-time employee of another corporation, and his actions on behalf of Continental were at all times subject to Birkle’s…
Excerpt of a 8,588-character opinion. The full text and citation network load in the interactive viewer above.