Sec Reg Damages Rules

• Price paid (not greater than offering price) minus:
• value at suit filing
• Resale price if P sold before filing of suit
• Resale price if P sold after filing but before judgment

• total amount of damages can not exceed offering price
• underwriter liabilty capped at total price underwritten and distributes
• PSLRA liability for an outside director who did not know of the violation

• requires disgorgement of profits
• made from purchase and sale within 6 months OR
• sale and purchase within 6 months
• must be a beneficial owner at the time of the purchase and at the time of the sale

• Equation:
• (Highest price in six month period - Lowest price in six month period) number of shares

• Out of Pocket Damages
• Face to Face Transactions
• PSLRA Liability

Contract price - Securities True Value at the time of the transaction

Section 21D(e)(1) award shall not exceed contract price - mean trading price during 90 day period beginning on date info disseminated to market

Restitution requires the D to give P whatever profit D made

• Recissionary Measure:
• If purchaser return of sales price
• if seller return of securities OR difference between original sales price & subsequent resale price

joint and several liability for covered person if knowingly committed a violation OR if damages exceed 10% of Ps net worth if net worth less than 200k

• otherwise proportionate liability based on percentage of responsibility
• Jury must determine percentage of responsibility and whether violation knowingly committed
• can't tell jury how damages are allocated

• Uncollectible share:
• each covered person liable in proportion to percentage of responsibility
• may not exceed 50% of proportionate share of covered person

covered person: any 10b-5 D or any outside director in a Section 11 action