GUSTAFSON VS ALLOYD CO, INC - JUDICIAL VS LEGISLATIVE POWER

In Gustafson, the Supreme Court decided that Section 12(2) of the 1933 Securities Act applies only to ''public offerings'' of securities by issuers or their affiliates. It does not apply to private offerings by securities issuers or their affiliates or secondary trading transacti ons by securities holders. The author argues that the case overrides c lear legislative directions and suggests some surprising implications. He believes the decision will have an unsettling effect on securities law and practice.