Brown v. Ivie
United States Court of Appeals for the Fifth Circuit
661 F.2d 62 (1981)
Brown, Ivie, and Lightsey (defendants except Brown, who was plaintiff) were equal shareholders under an unenforceable 1976 buyback agreement; in 1979, Ivie and Lightsey, already planning to oust Brown, told him a new buyback agreement was needed to secure company insurance, got him to sign it, then fired him a week later and tried to force him to sell his shares at below-market book value. Brown sued under Rule 10b-5, and the district court dismissed, finding no connection between the deception and any securities sale; Brown appealed.
Whether fraud used to induce a shareholder to sign a stock buyback agreement is sufficiently "in connection with" a securities sale to support a claim under SEC Rule 10b-5.