Securities and Exchange Commission v. Guild Films Co.
United States Court of Appeals for the Second Circuit
279 F.2d 485 (1960)
Relevant factsFree
Roach, controlling shareholder of F.L. Jacobs, took out loans secured by F.L. Jacobs stock, and after that stock lost value following F.L. Jacobs' acquisition of unregistered Guild Films (defendant) stock, the lending banks demanded additional collateral in the form of 50,000 Guild shares; when Roach defaulted, the banks tried to sell the Guild shares to recoup their loan, and the SEC (plaintiff) sued to block the sale of the unregistered stock, arguing the banks were acting as underwriters subject to registration requirements.
IssueFree
Whether a purchase of a security, for purposes of determining underwriter status, is defined as a disposition of a security for value.