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BROWN v. IVIE
United States Court of Appeals, Fifth Circuit. Unit B (1981) | 661 F.2d 62
TL;DR: Majority shareholders allegedly tricked a minority shareholder into signing a new buy-sell agreement to force him out and acquire his stock cheaply. The court held this fraudulent inducement was 'in connection with' a securities sale, allowing a federal securities fraud claim to proceed.
Legal Significance: Fraudulently inducing a party to enter into a contract that creates a new obligation to sell securities satisfies the 'in connection with' requirement of Rule 10b-5. The fraud directly 'touches' the securities transaction because the contract itself is considered a 'sale' of a security.