This section contains the nature of the case and procedural background.

Deutschman (P) alleged that Ds hatched a plan to artificially keep the stock of Beneficial (D) high by giving false information about the losses suffered at D's insurance division in specifically stating that the problems were behind D and they were covered by sufficient reserves. As a result of this lie; those who purchased the stock suffered losses when the truth became known. P's complaint did not allege that Ds at any time during this period of lies traded in D stock. P had actually purchased call options which became worthless when the truth came out. The district court held that option traders lacked standing to assert a cause of action under 10(b) and 10b-5.

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