Rude v. Cambell Square, Inc.

MEMORANDUM OPINION

BOGUE, District Judge.

FACTS

This is an action brought under SEC Rule 10b-5, 17 C.F.R. § 240.106-5, alleging fraud in the purchase of stock of a closely-held corporation.

On October 1, 1964, William S. Reese and Jerry G. Brodsky agreed to form a corporation to be known as Cambell Square, Inc. for the principal purpose of developing and renting land. The corporation issued 400 shares of common stock at a par value of $100.00 per share. William S. Reese was issued 202 of those 400 shares in return for: a $10,000.00 note; the personal property, good will and trade name of a…