As a general rule, only purchasers or sellers of securities have standing to sue under Rule 10b-5 of the Securities Exchange Act of 1934. Since the rule was first articulated in Birnbaum v. Newport Steel Corp., its literal application has been rare and it has been emasculated to such an extent that it is virtually nonexistent in some jurisdictions. Eason v. General Motors Acceptance Corp. is the first decision expressly to reject Birnbaum's standing limitation. It would appear from the present state of disarray in the circuit courts that it is only a matter of time before Eason's lead is adopted and Birnbaum is laid to rest.
Dennis A. Graham,
Birnbaum Rejected: Expansion of the Standing Requirement under Rule 10b-5: Eason v. General Motors Acceptance Corp., 490 F.2d 654 (7th Cir. 1973),
53 Neb. L. Rev. 621
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