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.

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

The legal issues presented in this case will be displayed here.

The court's holding and decision will be displayed here.

Legal analysis from Dean's Law Dictionary will be displayed here.