Opinion ID: 406453
Heading Depth: 2
Heading Rank: 1

Heading: Purchases and Sales

Text: 15 In order to set forth a valid 10b-5 cause of action, a plaintiff must allege that there has been wrongdoing in connection with the purchase or sale of a security. 11 Brown v. Ivie, 661 F.2d 62, 65 (5th Cir. 1981); Alley v. Miramon, 614 F.2d 1372, 1380 (5th Cir. 1980); Herpich v. Wallace, 430 F.2d 792, 805-806 (5th Cir. 1970). 16 Section 10(b) and Rule 10b-5 do not proscribe all fraudulent schemes concocted to take undue advantage of investors, but only those fraudulent schemes that are employed in connection with the purchase or sale of any security. 17 Herpich v. Wallace, supra at 805-806. 18 Thus, a valid 10b-5 complaint must allege facts which could support a finding that any alleged wrongdoing has been in connection with the purchase or sale of securities.