Fed. Sec. L. Rep. P 95,244 James J. Spilker v. Shayne Laboratories, Inc., a Corporation

The only issue in this appeal is a simple question of law: Does the fact that the defendants made two intrastate telephone calls connected to a securities transaction satisfy the jurisdictional requirement of “use of any means or instrumentality of interstate commerce” in § 10 of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, and Securities and Exchange Commission Rule 10b — 5, 17 C.F.R. 240.10b — 5? The trial court, apparently relying on this Court’s brief per curiam opinion in Burke v. Triple A. Machine Shop, Inc., 438 F.2d 978 (9th Cir. 1971), held that it did not, and dismissed the plaintiff’s suit. We reverse and remand for further proceedings.

I. .

Defendant Shayne Laboratories, Inc. is a Nevada Corporation. On June 12, 1970, a public stock offering was made on behalf of Shayne pursuant to Regulation A of the Securities and Exchange Act of 1933 of 55,000 shares of voting common stock at a price of $5 per share. Defendant Barton was hired by Shayne to supervise the sale of the balance of stock that had not been sold as of December, 1970. Defendant Feldmeier was a registered stock broker in San Francisco, and plaintiff Spilker was one of his customers.

On March 11,…