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P's complaint charged transgressions of the statutes by Ds to do 'spin-offs' to and among its stockholders of the unregistered shares of stock owned by D in other corporations. D Datronics would enter into an agreement with the principals of a private company. The agreement provided for the organization by D of a new corporation, or the utilization of one of D's subsidiaries, and the merger of the private company into the new or subsidiary corporation. The principals of the private company would receive the majority interest in the merger-corporation. The remainder would be taken by D for a nominal sum per share. D used some of the stock to pay the bills for the transaction. The remainder was then distributed by D among its shareholders. D reserved for itself approximately one-third of the shares. None of the newly acquired stock was ever registered. P sought an injunction against D claiming that D was selling unregistered securities. Ds contend, and the District Court concluded, that this type of transaction was not a sale. Ds believe that it was no more than a dividend parceled out to stockholders from D's portfolio of investments. Summary judgment went to D and P appealed.

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