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In the Reyos case, 85 plaintiffs sought damages for alleged violations by Gale and Haslem (D), in connection with sales by the plaintiffs of their UDC shares, of § 10(b) and Rule 10b-5. Gale and Haslem (D) were employees at First Security Bank. First Security Bank which acted as a transfer agent for the UDC. The UDC was established to own and manage oil, gas, and mineral rights of mixed-blood descendants of the Ute Indian Tribe. UDC issued ten shares to each mixed-blood tribe member. The shares gave the tribe the first right of refusal to buy the shares. If no member of the tribe was willing to buy the shares, then sales could be made to nontribal members. In 1964 and 1965, UDC stock was sold by mixed-bloods at prices ranging from $300 to $700 per share. Shares were being transferred between whites, however, at prices from $500 to $700 per share. Ds purchased shares from mixed blood stockholders without disclosing that nontribal members were trading UDC shares at higher prices than Ds were offering. The court found this a scheme to defraud within 10b-5. The Court of Appeals reversed; Ds were only liable on the sales of shares they purchased themselves and no other sales they arranged and that there was insufficient reliance by Ps on any statements or conduct of Ds. The Supreme Court granted certiorari.

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