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BLUE CHIP STAMPS v. MANOR DRUG STORES
Supreme Court of United States (1975) | 421 U.S. 723; 95 S.Ct. 1917; 44 L.Ed.2d 539
TL;DR: The Supreme Court held that only actual purchasers or sellers of securities have standing to sue for damages under the anti-fraud provisions of SEC Rule 10b-5. Plaintiffs who were merely discouraged from buying stock by a misleadingly pessimistic prospectus could not recover for their lost opportunity.
Legal Significance: This case formally adopted the *Birnbaum* rule, establishing the "purchaser-seller" requirement as a crucial standing limitation for private damages actions under Rule 10b-5. It significantly narrowed the class of potential plaintiffs, emphasizing policy concerns about vexatious litigation in securities law.