Full opinion text
MEMORANDUM OPINION AND ORDERS ROSS T. ROBERTS, District Judge. This is an action in which nine plaintiffs, as holders of certain revenue bonds issued by defendant Arkansas Valley Environmental & Utility Authority (“the Authority”), seek damages and other relief in connection with an alleged securities fraud relating to those bonds. Named as defendants together with the Authority are three business corporations, Milanson Development Co., Stone Enterprises, Inc., and C.M. Stone & Co.; a bank, Plaza Bank & Trust Company (“Plaza Bank”); and three individuals, Fred W. Rausch, an attorney, Julian M. Riley, an attorney, and one Roy G. Miller. The complaint is in seven counts, the first asserting claims under sections 10(b) and 20 of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) and 78t, and under Rule 10b-5 of the Securities Exchange Commission, 17 C. F.R. § 240.10b-5. The remaining six counts allege state law claims for violations of the Uniform Securities Act as adopted in Missouri, Chapter 409 R.S.Mo. 1969 (as amended) (Second Claim), for common law fraud and deceit (Third Claim), for negligence (Fourth Claim), for punitive damages (Fifth and Sixth Claims), and for breach of trust (Seventh Claim). The matter comes before me on separate motions to dismiss filed by defendants Rausch and Plaza Bank. Plaza Bank asserts thereby that plaintiffs’ claims are time barred. Rausch joins in that suggestion, and additionally urges that plaintiffs Allgood, McFeely and Kessler lack standing to assert 10(b) and 10b-5 claims, that venue is improper with respect to plaintiffs’ 10(b) and 10b-5 claims, that personal jurisdiction over him with regard to the state law claims is lacking, and that the complaint fails to state a claim as against him. None of the other defendants has filed a responsive pleading of any kind. Neither defendant’s motion is styled as one for summary judgment, but both moving defendants and plaintiffs have submitted affidavits and other evidentiary materials in support of their respective positions. Those materials relate to the statute of limitations question, the venue question, and the question of personal jurisdiction over defendant Rausch. Since I have not excluded the materials, the issues to which they relate will be treated under the summary judgment procedure provided for in Rule 56. See Fed.R.Civ.P. 12(b). The remaining issues raised by the motions will be dealt with directly under Rule 12(b). I BACKGROUND In the spring of 1974, defendant Authority, an Oklahoma trust with its principal place of business in the State of Oklahoma, issued certain revenue bonds in the total principal amount of $840,000, to finance the construction of streets, curbs and gutters in a private real estate development in or near the community of Prue, Oklahoma. Those bonds are hereinafter referred to as the “Series A 1973” bonds. Plaintiffs (or in three instances, their respective predecessors in title) are purchasers of certain of the Series A 1973 bonds. According to the averments of the complaint, paraphrased and synthesized for present purposes, with a liberal reading in plaintiffs’ favor, the bonds in question were essentially worthless from the outset. In general, it is alleged that defendants assisted one another in the perpetration of a fraud in connection with that fact by causing the bonds to be issued and marketed, and by failing to disclose on the face of the bonds or otherwise in connection with their issuance and sale a number of matters which, if truly stated or revealed, would have disclosed to the buying public the inherently valueless nature of the instruments. Asserted as being among such matters was the fact that the bonds were (contrary to the pronouncement on the face of each bond) either totally unsecured or at least undersecured or improperly secured; the fact that the bonds had been issued without any closing procedure; the fact that the underwriting discounts, commissions and various fees connected with issuance amounted to over 30% of the total bond proceeds; the fact that the underlying project for which the bonds were issued was undercapitalized and would have been so even .if all of the bond proceeds had been paid over to defendant Authority; the fact that no effort had been made to determine whether the revenues generated by the project would be sufficient to pay the interest on the bonds, and that in fact a realistic appraisal of the project would have demonstrated the negative of that proposition; the fact that the project developers were inexperienced in such projects; and the fact that, because of improper use of the bond proceeds, difficulties might exist with respect to federal income tax exemption for the bond interest. As to the roles of the alleged participants, plaintiffs assert that defendant Miller was a controlling person of the defendant Authority itself, as well as of defendant Milanson Development Co., the proposed lessee of the project property, and defendant C.M. Stone & Co., which apparently acted as the underwriter of the bond issue; that defendant Riley acted as a promoter of the project together with Miller; that defendant Rausch acted as bond counsel; and that defendant Plaza Bank acted as trustee and paying agent for the issue. Precisely when the present plaintiffs or their predecessors acquired their bonds and when or in what manner difficulties first became apparent is unclear from the materials presently before me, although it is clear that a default in the payment of interest on the bonds occurred in June or July of 1975. In any event, our scene now shifts to the United States District Court for the Northern District of Alabama, where on May 2, 1977, one Clarence Bishop, as a purchaser and holder of certain bonds issued by the Authority a year prior to the Series A 1973 bonds (such earlier bonds being referred to hereinafter as “Series A 1972” bonds), and as the sole named plaintiff, instituted a class action proceeding alleging securities fraud claims in respect of both the Series A 1972 and Series A 1973 issues. Named as defendants therein were some 16 persons, corporations and business entities, including six of the defendants named in the present case. The complaint, except for its class action allegations and the fact that it dealt with both the Series A 1972 and Series A 1973 issues, was substantially similar to the complaint presently before me. The class for which certification was requested was described as being “composed of all persons who purchased the Series A, 1972 and 1973 Bonds,” except for certain excluded groups consisting of underwriters, dealers and like persons. From the information presently available it appears that the Bishop suit remained in its original posture (and without any class action certification) until October 31, 1979, when four of the present plaintiffs moved to intervene in the proceedings. That motion was granted on February 27, 1980. The class action aspect of the matter was resolved on March 28, 1980, with the District Court’s certification of a Rule 23(b) class consisting (as presently material) of “all persons who now hold or who do not hold but purchased... Series A 1972 and Series A 1973 (Bonds).... ” In that ruling, in response to defendants’ argument that plaintiff Bishop lacked “standing,” under the Supreme Court’s holding in Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975), to assert any claim on behalf of the purchasers of Series A 1973 bonds, the court concluded that since intervening parties who had purchased Series A 1973 bonds were before it, and since the two bonds issues seemed intertwined in several respects, the appropriate procedure was to divide the general class into two subclasses consisting, respectively, of those who had purchased or who held Series A 1972 bonds, and those who had purchased or who held Series A 1973 bonds. Shores v. Arkansas Valley Environmental & Utility Authority, Fed.Sec.L.Rep. (CCH) ¶ 97,345 (March 28, 1980). An order approving the form of class action notice, and directing its issuance, was entered on September 22, 1980. On February 4, 1981, however, the District Court reversed its position with respect to the “standing” issue presented by the joinder of claims on both series of bonds. The court apparently concluded, upon further reflection, that since Mr. Bishop himself had purchased only Series A 1972 bonds, and since the two bond issues were in fact separate, Mr. Bishop as the sole named original plaintiff lacked standing, under the Blue Chip rule, to maintain an action into which purchasers or holders of Series A 1973 bonds might properly have intervened. The court accordingly dismissed all claims relating to the Series A 1973 bonds, granted Plaza Bank’s motion to dismiss it from the case (since it had acted only with respect to the Series A 1973 bonds) and, in effect, decertified the class with respect to purchasers or holders of Series A 1973 bonds. Official notice of this action, together with the court’s certification of the ruling as final for purposes of appeal, was given on March 17, 1981. The time for appeal of the Alabama District Court’s order expired on April 16,1981, with no appeal having been taken. The present plaintiffs (except Greenlee), as purchasers or holders of Series A 1973 bonds, thereupon instituted the instant proceeding by filing their complaint in this Court on May 19, 1981. Plaintiff Greenlee was added by an amendment filed June 4, 1981. II STANDING OF PLAINTIFFS ALLGOOD, McFEELY AND KESSLER According to the allegations of the complaint, plaintiffs McFeely and Kessler acquired their Series A 1973 bonds by way of inheritance from their mother. Plaintiff Allgood sues as the trustee of a decedent’s trust which holds Series A 1973 bonds purchased by the decedent. Defendant Rausch suggests, under the holding in Blue Chip Stamps v. Manor Drug Stores, supra, that all three of these plaintiffs lack standing to assert 10(b) and 10b-5 claims. I agree. Blue Chip represents the Supreme Court’s affirmation and adoption of the so-called “Birnbaum rule,” first articulated by the Second Circuit in Birnbaum v. Newport “It shall be unlawful for any person, directly or indirectly, by the use of any means of instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.” Steel Corp., 193 F.2d 461 (2d Cir.1952). In Birnbaum, Rule 10b-5 (which is the critical source for present purposes, since section 10(b) does not itself make any conduct unlawful) was interpreted as having application only to frauds committed upon actual purchasers or sellers of a security. This result was found to be compelled both by the language of the Rule (making it unlawful to do certain things “in connection with the purchase or sale of any security”) and by the historical reasons for its adoption (simply to extend to defrauded sellers the same sort of protection which section 17(a) of the 1933 Securities Act had previously accorded only to defrauded purchasers). The majority opinion in Blue Chip validated this analysis, added the Supreme Court’s own explanation of the policy considerations supporting the rule, and made quite clear that the words “purchaser” and “seller” are to be construed and applied literally. Since plaintiffs Allgood, McFeely and Kessler are, by their own assertions, at best donees or legatees with respect to the Series A 1973 bonds they hold, and thus clearly neither “sellers” nor “purchasers” of those bonds, perhaps nothing more needs to be said. Compare Kerrigan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 450 F.Supp. 639, 646-47 (S.D.N.Y.1978) (widow of purchaser lacks standing to assert 10b-5 claim); and Lincoln Nat. Bank v. Lampe, 414 F.Supp. 1270, 1280-81 (N.D.Ill.1976) (trust beneficiary lacks standing to assert 10b-5 claim). I think it worthwhile, however, to carry the analysis one step further, by noting that the fundamental premise underlying both Birnbaum and Blue Chip is that Rule 10b-5 can apply, in any event, only to persons who have been defrauded by the securities violation in question; that is, to persons who are caused by the violation to act or refrain from acting in respect of a security, or upon whom the violation otherwise works a fraud. As the majority opinion in Blue Chip makes clear, the Birnbaum rule’s focus upon a literally applied requirement of “purchaser” or “seller” status is simply a method — admittedly arbitrary — of further limiting the class of persons who might otherwise be considered as having been defrauded in the broad sense mentioned above. In the present case, however, it is rather obvious that plaintiffs Allgood, McFeely and Kessler have not personally been defrauded in any way at all, even in the most general sense. Their respective predecessors may have been, but as defendant Rausch correctly points out, any cause of action which might thereby have been created was personal to those predecessors; it did not inure in or automatically follow the security itself. Independent Investor Protective League v. Saunders, 64 F.R.D. 564, 575 (E.D.Pa.1974); International Ladies Garment Wkrs. U. v. Shields & Co., 209 F.Supp. 145, 149 (S.D.N.Y.1962). Plaintiffs suggest that a 10(b) and 10b-5 cause of action is both “survivable”— that is, it survives the death or corporate demise of the person or corporation in whom it originally existed — and assignable. Even if both such points are granted, however, they do not materially assist plaintiffs, given the presently pleaded posture of this case. A cause of action which survived the death of an original bond purchaser would survive as an asset of his or her estate, 1 Am.Jur.2d Abatement, Survival and Revival, § 107 (1962); 1 C.J.S. Abatement and Revival, § 162 (1936), and some further act — unpleaded here — would be necessary to vest it in someone other than the personal representative of that estate. Again, the cause of action itself is entirely separate and distinct from the security which gave rise to it, and does not automatically follow the ownership of that security. Independent Investor Protective League v. Saunders, supra; International Ladies’ Garment Wkrs. U. v. Shields & Co., supra. Plaintiffs here have pleaded nothing whatsoever to suggest that they have ever been assigned their predecessors’ causes of action regarding those bonds, or have otherwise acceded to ownership thereof. In fact, the complaint rather plainly suggests they are attempting to assert their own 10(b) and 10b-5 causes of action, based simply upon their ownership or holding of the bonds. For the reasons stated previously they lack standing to assert such claims — against Rausch, or indeed against any defendant. A similar result, I feel, should obtain as regards the state law claims asserted by these three plaintiffs. Since any cause of action which might have accrued to a plaintiff’s predecessor upon that predecessor’s purchase of the bonds would have survived to his or her estate and personal representative, if it survived at all, and since these plaintiffs were simply given the bonds they hold, after the occurrence of any of the alleged acts of fraud, negligence or other breach of duty, it is difficult to understand how they might have a cause of action of any kind of their own to assert, deriving simply from ownership of the bonds. Thus, for example, as to a claim under the Missouri Securities Act (Second Claim), or for common law fraud and deceit (Third Claim), it would seem rather clear that, as mere recipients of gifts of the bonds in question, plaintiffs can hardly be said to have acted in reliance upon any misrepresentation or omission by the defendants, or directly to have suffered damage thereby. A similar point may be made with respect to a negligence or other breach of duty claim against any of the defendants since, again, it is difficult to conceive how the donee of a bond, valueless at the time he receives it, may himself be said to have been legally damaged by the earlier conduct which rendered that bond valueless. To sanction such a theory would be to create a new and separate cause of action each time a worthless bond is given by one person to another — a result that common sense does not commend. I do not gainsay the idea that one who subsequently purchased a bond from an earlier holder might, in certain circumstances, be able to maintain an action against defendants such as these, based upon his or her own purchase and consequent injury, but that is not the situation with the present three plaintiffs. I conclude, accordingly, that all of the claims presently asserted by Allgood, McFeely and Kessler — both federal and state — are subject to dismissal. There is at least a possibility, however, that a factual background may exist which, if properly pleaded, would demonstrate that these plaintiffs are in a position to assert survived claims of their predecessors. I will, therefore, grant leave for the filing of an amended complaint by them within thirty (30) days from the date of this opinion. Further, since not even Rausch has moved to dismiss plaintiffs’ state law claims on this basis, and since the court’s dismissal of those claims sua sponte and without notice is a radical step, not to be taken lightly in such circumstances, Barnes v. Dorsey, 354 F.Supp. 179, 184 (E.D.Mo.1973), aff’d. 480 F.2d 1057 (8th Cir.1973), I will, as an alternative to the right to replead granted above, allow plaintiffs Allgood, McFeely and Kessler a period of thirty days from the date of this Order within which to show cause why their state law claims, in their presently pleaded form, should not be dismissed. See Wong v. Bell, 642 F.2d 359, 361-62 (9th Cir.1981). Ill STATUTES OF LIMITATIONS A. 10(b) and 10b-5 Defendants Rausch and Plaza Bank urge that plaintiffs’ complaint, taken together with the various documentary materials filed in connection with the present motion, demonstrates that plaintiffs’ 10(b) and 10b-5 claims are time barred. Essentially, defendants suggest that the relevant limitations period is two years; that plaintiffs are shown to have had either actual or constructive knowledge of the fraud of which they complain more than two years prior to the filing of this suit; and that the class action tolling doctrine announced in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), is inapplicable. As defendants correctly note, Congress has not provided a statute of limitations for private civil actions brought under section 10(b) and Rule 10b-5. Accordingly, as in other cases involving federal judicially created remedies, the law of the forum state must be consulted, and the state limitations period governing the mostly closely analogous state created cause of action must be applied. See generally Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946); United Automobile Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976) (footnote 29); Morris v. Stifel, Nicholaus & Co., 600 F.2d 139 (8th Cir.1979). Here, of course, the forum state is Missouri, and the Eighth Circuit’s decision in Morris v. Stifel, Nicholaus & Co., supra, requiring that section 409.411(e), R.S.Mo.1969 (as amended) (the limitations section of the Missouri Uniform Securities Act), be applied to claims of the present nature, is directly controlling. The relevant limitations period insofar as plaintiffs’ 10(b) and 10b-5 claims are concerned is thus the two year period established by that statute. Cf. Buder v. Merrill Lynch, Pierce, Fenner & Smith, 644 F.2d 690, 692 (8th Cir.1981). The applicable limitations period being thus ascertained, the next inquiry involves a determination as to when that period began to run. Section 409.411(e) itself provides that its two year period shall commence as of the date of the “contract of sale” of the security. The decision in Morris, however, makes clear that insofar as federal 10(b) and 10b-5 claims are concerned, federal common law principles will be applied to determine the point of commencement of a limitations period, even though the state statute being utilized to determine the length of the period contains different provisions. Morris v. Stifel, Nicholaus & Co., supra at 140; Buder v. Merrill Lynch, Pierce, Fenner & Smith, supra. Those federal common law principles establish that in cases involving elements of fraud, a statute of limitations will not begin to run until the fraud “is or should have been discovered.” Vanderboom v. Sexton, 422 F.2d 1233, 1240-41 (8th Cir.1970). Thus, the two year limitations period applicable to plaintiffs’ 10(b) and 10b-5 claims here must be measured from the date upon which it may be said that plaintiffs first discovered or, in the exercise of due diligence and upon reasonable inquiry, could have discovered the fraud of which they now complain. Morris v. Stifel, Nicholaus & Co., supra; Buder v. Merrill Lynch, Pierce, Fenner & Smith, supra. Having outlined the general framework within which the instant question must be decided, I feel it may facilitate analysis to turn now to a determination of whether the class action tolling doctrine announced in American Pipe & Construction Co. v. Utah, supra, is applicable in this case. If it is not, then for reasons which will subsequently appear plaintiffs’ 10(b) and 10b-5 claims are rather clearly time barred under any view of the facts before me. If, on the other hand, the doctrine is applicable, at least a rather crisply defined question can be posed with respect to the timeliness of plaintiffs’ claims. The class action tolling rule was originally articulated by Mr. Justice Stewart, in American Pipe, in the following language: “We hold that in this posture, at least where class action status has been denied solely because of failure to demonstrate that ‘the class is so numerous that joinder of all members is impracticable,’ the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status.” 414 U.S. at 553, 94 S.Ct. at 766. As might be anticipated from this quotation of the rule, the precise questions for my determination are (a), whether the rule may be applied in cases where class action status is denied or terminated for some reason other than a lack of “numerosity,” and more specifically, whether it can be applied where denial or termination is premised upon the named plaintiff’s lack of “standing” to maintain the class claims, and (b), whether the rule may be applied in situations where, after class action status has been denied or terminated, a former class member initiates a new and separate action rather than seeking to intervene in the original suit. As to the first such question, I note that a number of lower federal courts have, since the decision in American Pipe, applied its rule in a variety of situations where class action status was denied or terminated for reasons other than lack of “numerosity.” See Parker v. Crown, Cork And Seal Co., Inc., 677 F.2d 391, 393 n. 2 (4th Cir.1982) (lack of “numerosity” as to one claim; named plaintiff not representative of the class as to another claim), cert. granted, - U.S. -, 103 S.Ct. 338, 74 L.Ed.2d 381 (1982); Satterwhite v. City of Greenville, 578 F.2d 987, 991, 997 (5th Cir.1978) (lack of “commonality” and “typicality;” class representative not member of class) (dicta), vacated on other grounds, 445 U.S. 940, 100 S.Ct. 1334, 63 L.Ed.2d 773 (1980); McCarthy v. Kleindienst, 562 F.2d 1269, 1272-74 (D.C.App.1977) (lack of “typicality,” untimeliness and failure to meet 23(b)(3) requirements); Peritz v. Liberty Loan Corp., 523 F.2d 349, 354 n. 5 (7th Cir.1975) (untimely certification); Green v. U.S. Steel Corp., 481 F.Supp. 295, 299-301 (E.D.Pa.1979) (lack of “typicality” and “commonality”); Johnson v. Brace, 472 F.Supp. 1056, 1059 (E.D.Ark.1979) (failure to meet 23(b)(2) requirements); Gramby v. Westinghouse Elec. Corp., 84 F.R.D. 655, 662 (E.D.Pa.1979) (lack of adequate representation); Bantolina v. Aloha Motors, Inc., 75 F.R.D. 26, 32-3 (D.Haw.1977) (withdrawal of class representative); Morton v. Charles County Board of Education, 373 F.Supp. 394, 395-96 (D.Md.1974) (lack of “typicality”), aff’d. 520 F.2d 871 (4th Cir. 1975), cert. den. 423 U.S. 1034, 96 S.Ct. 566, 46 L.Ed.2d 408 (1976); Goldstein v. Regal Crest, Inc., 62 F.R.D. 571, 579-80 (E.D.Pa. 1974) (lack of “commonality”). And it has been applied in at least one case where lack of “standing” was directly involved. See Haas v. Pittsburg National Bank, 526 F.2d 1083, 1095-98 (3d Cir.1975). In short, the American Pipe rule has in fact been applied in cases involving almost every conceivable basis upon which class action status might be denied or terminated. These courts have found no reason to limit application of the rule to instances where denial or termination is based on lack of “numerosity;” and as a general matter, given the rationale expressed in American Pipe, neither do I. That rationale was based upon two essential points: (a) that a contrary rule would inevitably force “passive” (i.e., unnamed) class members to file motions to intervene, in order to protect themselves against the running of a limitations period if class action status was later denied or terminated — a situation which “would deprive Rule 23 class actions of the efficiency and economy of litigation which is the principal purpose of the procedure,” 414 U.S. at 553, 94 S.Ct. at 766; and (b), that the basic policy considerations behind a statute of limitations — “to promote justice by preventing surprises through revival of claims that have been allowed to slumber until evidence has been lost, memories have faded and witnesses have disappeared,” 414 U.S. at 554, 94 S.Ct. at 766,- — would be satisfied since the filing of a class action within the limitations period would serve to advise a defendant not only of the substantive claims which must be defended, but also of the number and at least generic identity of the persons who have such claims. So long as those two points of rationale are accommodated by the matter at hand — and as the cases indicate, they may be satisfied in a rather wide variety of situations — I perceive no sound reason for any limitation based upon technical distinctions concerned with why class action was eventually denied or terminated. I would agree, instead, with the suggestion that the appropriate focus of inquiry here should simply be upon the extent to which the claims asserted in the earlier class proceeding have in fact placed a defendant upon notice of the claims presently at issue. See Comment, The American Pipe Dream: Class Actions and Statutes of Limitations, 67 Iowa L.Rev. 743 (1982). It is with these thoughts in mind that I examine defendant Rausch’s suggestion that American Pipe cannot be applied in a case such as the present one, where the class in question was decertified upon a determination that the class representative lacked “standing” to assert a claim on behalf of the class. In support of that position, Rausch argues that a suit instituted by one who lacks standing is a nullity from the outset — a “nonexistent lawsuit” — citing McClune v. Shamah, 593 F.2d 482 (3d Cir. 1979), and Hobbs v. Police Jury of Moorehouse Parish, 49 F.R.D. 176 (W.D.La.1970), and accordingly that a class action commenced by one who lacks standing cannot logically function to toll a statute of limitations. I note that both such cases were concerned with intervention situations and held, as have other decisions, that a suit instituted by one who lacks standing cannot be saved by the intervention of a party who has standing, the theory being that intervention is an ancillary proceeding which requires the existence of a properly instituted main suit. But however that may be, it can hardly be said that a suit commenced by one who lacks standing is in any literal sense a “nonexistent” suit. It may be a defective suit, subject to a motion to dismiss or perhaps even to the court’s dismissal sua sponte, but it is for all that no less the judicial assertion of a claim, functioning to give a defendant notice of whatever causes of action are asserted therein. And where such a claim is asserted by way of a class action, and in fact covers the causes of action which a class member himself could properly bring, a defendant has received just as much notice as might have been imparted if the proceeding had been instituted by that class member. In fact, if one were to deal only in generalities, a class action which is denied or terminated because the class representative lacks “standing” might often be more likely to give a defendant actual notice of the claims of individual class members than one where denial or termination was based upon a lack of “typicality” or “commonality.” Nor, in my view, is there anything singular or peculiar with respect to “standing” that would generally prevent application of the other consideration expressed in American Pipe — the concern that where the determination to disallow the class action is made upon “subtle factors,” a rule “requiring successful anticipation of the determination of the viability of the class would breed needless duplication of motions [to intervene].” Standing questions are ones with which both skilled counsel and skilled courts sometimes experience considerable difficulty, even after extensive discovery and when intimately acquainted with the facts, as vividly demonstrated by the history of the present litigation itself. I can see no more reason, as a general matter, to require a passive class member to anticipate the existence of and ultimate ruling upon that question than to require him to do so with respect to questions of “numerosity,” “commonality” or “typicality.” I conclude, accordingly, that the fact that a class action is disallowed because the class representative lacks “standing” does not, per se, prevent application' of the American Pipe tolling rule. Haas v. Pittburg National Bank, supra. Instead, I suggest again that the appropriate focus of inquiry should be upon the extent and character of the notice of the later individual claims which the defendant actually received from the class action. In applying that method of analysis to the 10(b) and 10b-5 claims in this case,-1 note that the relevant portions of plaintiffs’ present complaint are for the most part nearly identical to — and in many instances a verbatim copy of — the corresponding allegations in the second amended complaint filed in the Alabama proceedings. Since that is so, and since by virtue of those proceedings defendants were made aware (actually in some instances and at least constructively in all) of the identities of the present claimants, it would seem clear that the prior Alabama class action has in fact functioned to alert defendants to the claims being asserted against them here. Indeed, defendants have apparently had the benefit of a considerable amount of discovery in the Alabama proceedings with regard to those claims. In these circumstances, I find nothing in the fact that class certification was terminated because of a lack of standing of the class representative which would prevent an application of the American Pipe rule in the present case. The second basic question posed above— whether American Pipe can be applied to a separate suit filed after denial or termination of the class action — is more troublesome. Inquiry into the question discloses a somewhat enigmatic footnote in one subsequent Supreme Court decision, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 176 n. 13, 94 S.Ct. 2140, 2152 n. 13, 40 L.Ed.2d 732 (1974), an equally enigmatic comment in a dissenting opinion by Mr. Justice Powell in another Supreme Court case, United Airlines, Inc. v. McDonald, 432 U.S. 385, 402, 97 S.Ct. 2464, 2474, 53 L.Ed.2d 423 (1977), and a further comment by Mr. Justice Marshall in a concurring/dissenting opinion in yet another Supreme Court decision, Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 474-75, 95 S.Ct. 1716, 1727-28, 44 L.Ed.2d 295 (1975); a split of authority among the Courts of Appeal, with the Second Circuit, the Ninth Circuit and the District of Columbia Circuit holding that American Pipe does not apply to a separate suit situation, while the Fourth Circuit and Seventh Circuit have held that it does, with dicta from the Fifth Circuit in accord; and with several District Court opinions on both sides of the question. The Eighth Circuit, so far as I can determine, has not yet addressed the problem. The difficulty arises in large part because of the presence of considerations not directly dealt with in American Pipe. The Court’s analysis there handles rather nicely the intervention/lack of “numerosity” situation with which the Court was faced: intervention in the original suit prevents a proliferation of litigation, and a lack of “numerosity” basis for disallowance of the class action almost by definition suggests that re-entry of the former class members, by way of intervention, will not create an unmanageable single piece of litigation. In other situations, however, the appropriate answer does not come so readily. Allowing tolling for separate suits after class action status is denied or terminated obviously has the potential of increasing the number of suits a defendant must defend, and may increase the general burden on the courts as well, and to that extent might be thought to cut across the grain of one of the implicit theories involved in American Pipe; but there are counterbalancing considerations. Where disallowance of the class is based upon reasons other than lack of numerosity — particularly where the problem is one of “typicality” or “commonality” — intervention of former class members back into the original suit may create an unmanageable piece of litigation which can be adequately handled, if at all, only by severance of claims and separate trials — a situation which to a considerable extent brings one back full circle to a situation of separate suits. Furthermore, intervention in these situations will often be permissive only, and it hardly seems sensible that a former class member’s claims should be saved if the court permits intervention but held time-barred if the court does not, or that passive class members should be required to forecast, at the outset, the outcome of this additional question. Arguably, of course, in some instances these concerns could be addressed by requiring that an effort first be made to intervene, with tolling to apply to separate suits only if intervention is not allowed, but in other situations the expected ruling may be so easily forecast as to make this a needless waste of time. Thus in the present matter, if the Alabama District Court remained faithful to the apparent predicate for its decertification ruling, it is difficult to conceive the basis upon which the court might have permitted a re-intervention by these plaintiffs. And there may be yet other potential problems. In the present case, for example, the court’s action in decertifying the sub-class consisting of Series A 1973 bond purchasers was coupled with a dismissal of all claims against defendant Plaza Bank, since it had no connection with the Series A 1972 bonds. It is obvious, however, that Plaza Bank is considered a “target” defendant insofar as the Series A 1973 plaintiffs are concerned, in the sense that it is apparently one of the few solvent prospective defendants left available for them to pursue. Whether their claims against the bank can be substantiated is, of course, quite another matter; but a rule which required them to intervene in the Alabama proceedings (even assuming that they could) and to forego those claims, or in the alternative to find all of their claims time barred, does not seem appropriate to me. In resolving these issues as far as the present case is concerned, it may not be necessary to go so far as to posit a general extension of the American Pipe tolling doctrine to all separate suit situations. There are, as just pointed out, certain features peculiar to the present litigation which might be treated as representing an exceptional situation,, justifying an application of the rule here even if it were ordinarily to be limited to intervention situations. I am, however, persuaded that, upon a balancing of the various considerations involved, a general extension of the rule to separate suit situations is preferable to one limiting the rule solely to cases in which former class members have intervened or attempted to intervene in the original suit. While it is undeniably true that in certain instances this will permit some fragmentation of the litigation against a defendant, that bare fact does not, in and of itself, appear to be a sufficient justification for refusing to apply the American Pipe tolling doctrine. After all, class members who simply “opt out” of the class will apparently have the benefit of the rule, at least if the footnote in Eisen v. Carlisle & Jacquelin, supra, is to be believed. And, of course, there is nothing which requires that multiple similar claims against a defendant be instituted jointly (by way of a class action or otherwise) to begin with. Accordingly, whether the present case is viewed as one involving exceptional circumstances, or instead whether the American Pipe rule is simply taken as extending generally to separate suit situations, I conclude that the present plaintiffs are entitled to the benefit of the rule in tolling the statute of limitations on their 10(b) and 10b-5 claims. That tolling period will run from the date of commencement of the Alabama class action proceeding on May 2, 1977, to the date the decertification of their class became final on April 16, 1981. Having reached this point, I pause to note that, depending upon the facts ultimately developed, it may in the future become necessary to address the question whether, as between American Pipe and McDonald, the Supreme Court has fashioned a rule which suspends the running of the statute of limitations, or instead extends it. The distinction lies in the fact that if suspension is involved the statute will commence to run again immediately upon finality of the order which denies or decertifies the class; while if extension is involved, in theory the plaintiff is simply granted an additional unit of time — most probably measured in terms of a “reasonable” period — in which to act after finality of the order which denies or decertifies the class. American Pipe itself clearly applied a suspension analysis, while McDonald could not have reached the result it did except through application of an extension theory. See generally Note, Class Actions and Statutes of Limitations, 48 U.Chicago L.Rev. 106 (1981). The Supreme Court has never expounded on the point, but the distinction could conceivably be of significance here because under a suspension theory the elapsed 32 days (48 days for plaintiff Greenlee, who was added as a party on June 4, 1981) between the date the order of the Alabama District Court became final and the date the present suit was filed must be counted against the two year limitations period, with the effect of establishing June 4,1975 (or for Greenlee June 20, 1975), rather than May 2, 1975, as the pivotal date in connection with whether plaintiffs had or should have had knowledge of the fraud they assert. I do not feel it necessary to attempt an answer to the question at this point, however, since the proof before me is not sufficiently refined to make the distinction meaningful. I find, accordingly, that for present purposes plaintiffs’ 10(b) and 10b-5 claims will be timely if, on or before either May 2, 1975, or June 4, 1975 (or June 20, 1975, as to Greenlee), plaintiffs neither knew of the fraud of which they now complain nor in the exercise of due diligence could have discovered it; and time-barred if otherwise. Defendants urge that the facts presently before me demonstrate that plaintiffs in fact did know or could have known of the alleged fraud prior to those dates. On the present record, however, I must hold otherwise. Even if I disregard plaintiffs’ allegations of fraudulent concealment as being insufficiently pleaded, there is still no suggestion, much less proof, that plaintiffs had or should have had any awareness of fraud prior to default in the payment of the bond premiums — something that did not occur until June or July of 1975. Even if one assumes that each plaintiff should have been immediately alerted by that default, some reasonable period for inquiry must still be allowed them. The present record thus permits, at best, an argument that plaintiffs should have become aware of the fraud at some undefined point in time during the summer of 1975. Since the Bishop suit was filed on May 2, 1977, it is obvious that it cannot be said upon the facts presently available that plaintiffs’ 10(b) and 10b-5 claims are necessarily time barred. As a final point in this conclusion, defendants suggest that “a plaintiff has the burden of stating facts showing that the statute of limitations has not run when the complaint would otherwise show it has run,” citing Hellebrand v. Hoctor, 331 F.2d 453 (8th Cir.1964), and Duisen v. Terrel, 332 F.Supp. 127 (W.D.Mo.1971), and argue that the present complaint fails to set forth such facts. The difficulty with the point is in the fact that plaintiffs have specifically pleaded the tolling effect of the Bishop suit, which of course moves the point of inquiry back to May 2, 1977, and in the fact that I do not read the complaint as showing upon its face that, absent special circumstances, the statute would have run by May 2,1977. The complaint does not state when plaintiffs purchased their respective bonds, or demonstrate when they discovered the fraud, and under what is said to be the preferred rule there is no requirement that it do so. Resource Exploration & Min., Inc. v. Itel Corp., 492 F.Supp. 515, 516 (D.Colo. 1980); Fuls v. Shastina Properties, Inc., 448 F.Supp. 983, 986-87 (N.D.Cal.1978); Kerby v. Commodity Resources Incorporated, 395 F.Supp. 786, 791 (D.Colo.1975); Josef's of Palm Beach, Inc. v. Southern Investment Company, 349 F.Supp. 1057, 1061 (S.D.Fla. 1972). Accordingly, there is nothing on the face of the complaint which demonstrates that the fraud was or should have been discovered more than two years prior to May 2, 1977. Indeed, as previously noted, not even the evidentiary materials submitted in connection with the present motion demonstrate that fact. In these circumstances the Hellebrand rule is simply inapplicable. I believe it is apparent that a genuine factual issue, concerned with whether plaintiffs discovered or should have discovered the fraud of which they complain, prior to either May 2, 1975 or June 4, 1975, remains to be determined by the trier of fact. Summary judgment is of course inappropriate in those circumstances, and I conclude that defendants’ present motion, as it relates to plaintiffs’ 10(b) and 10b-5 claims, must accordingly be denied. B. State Law Claims As to plaintiffs’ claim under the Missouri Securities Act, Chapter 409, R.S.Mo.1969 (as amended), the relevant limitations period is, as previously noted, two years. Section 409.411(e), R.S.Mo.1969 (as amended). As also noted, however, that statute specifically provides that its two year limitations period begins to run at the time of the “contract of sale.” Since we deal here with a claim predicated directly upon a state statute, rather than with a federal cause of action which has simply borrowed the state limitations period, the language of the statute is of course controlling. In this connection, although plaintiffs’ complaint does not specifically allege when they purchased their respective bonds, it is abundantly clear from the complaint and associated materials that all such purchases occurred long before May 18, 1979 (two years prior to the date of filing of the instant suit). Further, it is also clear that neither section 516.230 (the Missouri “savings” statute, which grants an additional one year period within which to refile a claim which has earlier been non-prejudicially dismissed) nor section 516.190 (the Missouri “borrowing” statute) has any bearing here, since both those sections are ones which, under section 516.300, R.S.Mo.1969 (as amended), are rendered inapplicable with respect to a statutory cause of action which carries its own internal limitations ■provision, as Chapter 409 of course does. See Buder v. Merrill Lynch, Pierce, Fenner and Smith, 486 F.Supp. 56, 59 (E.D.Mo. 1980), aff’d. 644 F.2d 690 (8th Cir.1981). I conclude, accordingly, that plaintiffs’ Chapter 409 claims, not having been filed within two years of the date of the contracts of sale for the bonds in question, must be considered time barred. Beyond this, however, I cannot go, based on the record presently before me. Since plaintiffs’ remaining state law claims — common law fraud and deceit, common law negligence, and “breach of trust” (although it is not entirely clear just what sort of claim plaintiffs are attempting to assert in this latter connection) — are, as such, ones to which Missouri’s “borrowing” statute (§ 516.190) clearly could theoretically extend, it becomes critical to determine where such causes of action “originated” or “accrued,” within the meaning of that statute. The information presently available to me does not permit any definitive assessment of that question. I do not know, for example, where plaintiffs (all are presently non-residents of Missouri) were residing when they purchased their bonds, where the bonds were originally issued, where or how they were sold to plaintiffs, where or how information concerning them was given to plaintiffs, or where the various alleged acts of negligence took place. Nor have the parties directed any of their briefing efforts to the exceedingly complex legal issues which may need to be addressed in this connection. In these circumstances, since summary judgment procedure places the burden upon the moving party — here defendants Rausch and Plaza Bank — to establish the non-existence of any genuine issue of material fact as well as the moving party’s entitlement to judgment as a matter of law, I must deny defendants’ motion, without prejudice, as it relates to the argument that the causes of action asserted in plaintiffs’ Third, Fourth, Fifth, Sixth and Seventh Claims are time barred. IV FAILURE TO STATE A CLAIM A. 10(b) and 10b-5 Claims Defendant Rausch has moved, pursuant to Rule 12(b), to dismiss plaintiffs’ complaint as failing to state a claim against him upon which relief can be granted. In addressing this point, the analysis which is necessary may be facilitated by first outlining the requisite elements of plaintiffs’ claims, followed by a statement of the applicable pleading rules. With that general outline in mind, the specific averments of the complaint may then be examined to determine their sufficiency. With respect to a conventional 10b-5(b) claim, at least in the present sort of case, three general elements must be present: (a) a misrepresentation or omission of a material fact in connection with the purchase or sale of a security; (b) “scienter” in connection with that misrepresentation or omission; and (c), reliance by the plaintiff, in buying or selling the security, upon the misrepresentation or omission. Savino v. E.F. Hutton & Co., Inc., 507 F.Supp. 1225, 1281 (S.D.N.Y.1981). In connection with these elements, a fact is deemed “material” if there is a substantial likelihood that a reasonable investor would consider it significant or important when making a decision to buy or sell. Bell v. Cameron Meadows Land Co., 669 F.2d 1278, 1281 (9th Cir.1982); Kidwell ex rel Penfold v. Meikle, 597 F.2d 1273, 1293 (9th Cir. 1979); and cf. TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976); and Affiliated Ute Citizens of Utah v. U.S., 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972). As to “reliance,” a plaintiff must not only rely upon the misrepresentation or omission in the subjective sense, but in the objective sense (“reasonable reliance”) as well, Huddleston v. Herman & MacLean, 640 F.2d 534, 548, mod. 650 F.2d 815 (5th Cir.1981), rev’d on other grounds-U.S.-, 103 S.Ct. 683, 74 L.Ed.2d 548 (1983); City National Bank of Ft. Smith, Ark', v. Vanderboom, 422 F.2d 221, 230-31 (8th Cir.1970), although in cases where non-disclosure is the primary feature, if materiality is shown there is a rebuttable presumption of reliance. Affiliated Ute Citizens of Utah v. U.S., supra; Austin v. Loftsgaarden, 675 F.2d 168, 176-78 (8th Cir.1982); Continental Grain, Etc. v. Pacific Oilseeds, Inc., 592 F.2d 409, 412 n. 1 (8th Cir.1979); Vervaecke v. Chiles, Heider & Co., 578 F.2d 713, 715-18 (8th Cir.1978). Finally, as to “scienter” it is clear that simple negligence in misstating or omitting to state a material fact, or in failing to investigate concerning it, will not suffice, while actual intent to deceive, manipulate or defraud obviously will. Ernst & Ernst v. Hochfelder, supra; Aaron v. SEC, 446 U.S. 680, 100 S.Ct. 1945, 64 L.Ed.2d 611 (1980). What is less clear, since the Supreme Court has thrice declined to reach the point, is whether “reckless” behavior (however defined) will suffice, although apparently every Circuit which has considered the question has responded affirmatively, albeit with some differences in wording formulae. In order for a defendant to be liable in a 10b-5(b) case, however, it is not necessary that he personally and directly perpetrate the fraud, at least if existing lower federal court decisions are to be followed. Under those decisions liability may also be imposed, under theories of so-called “secondary” liability, upon persons who aid and abet a securities violation, or who conspire to its commission. See generally Ruder, Multiple Defendants in Securities Law Fraud Cases: Aiding and Abetting, Conspiracy, In Pari Delicto, Indemnification, and Contribution, supra footnote 32. Although the Supreme Court has expressly reserved the issue of whether 10(b) and 10b-5 liability may be imposed on these theories, Herman & McClean v. Huddleston, -U.S.-, 103 S.Ct. 683, 686 n. 5, 74 L.Ed.2d 548 (1983); Ernst & Ernst v. Hochfelder, supra at 191-92 n. 7, and at least one commentator has suggested that the Court will ultimately rule the matter in the negative, Fischel, Secondary Liability Under § 10(b) of the Securities Act of 1934, 69 Cal.L.Rev. 80 (1981), an effort has been made to plead both such theories in the present case and both will be examined briefly here. The lower federal court decisions mentioned above have by now rather clearly defined the elements of aiding and abetting liability in securities fraud cases. There are three prerequisites for such liability: (a) the existence of “primary” liability on the part of another person or persons, or at least proof of a “primary” violation by another person or persons; (b) the aider and abettor’s “knowledge” of the “primary” violation; and (c) “substantial” assistance by the aider and abettor in the achievement or consummation of the “primary” violation. Stokes v. Lokken, 644 F.2d 779, 782-83 (8th Cir.1981); ITT, an Intern. Inv. Trust v. Comfeld, 619 F.2d 909, 922 (2d Cir.1980); Edwards & Hanly v. Wells Fargo Securities Clearance Corp., 602 F.2d 478, 483 n. 5 (2d Cir.1979), cert. den. 444 U.S. 1045, 100 S.Ct. 734, 62 L.Ed.2d 731 (1980). In this context, “knowledge” involves more than mere negligence in failing to learn (“should have known”) the relevant facts respecting the “primary” violation. Stokes v. Lokken, supra. Whether “reckless” conduct in failing to learn of such facts is sufficient is, again, a question the Supreme Court has yet to determine, although the Circuits have given a substantially unanimous affirmative response. There is also said to be an aspect of interplay between all three of these elements — particularly the “knowledge” and “substantial assistance” requirements, Stokes v. Lokken, supra at 784, and at least some Circuits, including the Eighth, have held that the degree of “knowledge” and scienter required may be less (although presumably still above a mere negligence level) when the showing of “substantial assistance” is strong, while a greater showing of scienter may be required when there is a minimal showing on substantial assistance. Stokes v. Lokken, supra. Conspiracy liability, as such, is a topic less often addressed in securities fraud cases than aider and abettor liability, presumably because of the difficulties of proof associated with it. Its two essential elements, however, have been found to be no different in this context than in any other sort of civil litigation: (a) an agreement to accomplish a wrongful act — -here a securities law violation; and (b) an overt act in furtherance of the conspiracy. See generally, Gilbert v. Bagley, 492 F.Supp. 714, 727 (M.D.N.C.1980); Troyer v. Karcagi, 476 F.Supp. 1142, 1153 (S.D.N.Y.1979); Ruder, Multiple Defendants In Securities Law Fraud Cases, Etc., supra at 638-41. It is true that in the securities fraud area conspiracy liability will often bear a rather close affinity to aiding and abetting liability, since both require, as a predicate, a “primary” violation by another (which will, ordinarily, more than fulfill the need for any conspiratorial “overt act”), and since both would require scienter on the part of the defendant. There are, however, distinctions between the two theories. Thus the causa qua non of aiding and abetting is in the act of rendering assistance, while the critical element of a conspirator’s liability, as such, is the act of agreement. Ruder, Multiple Defendants In Securities Law Fraud Cases, Etc., supra. Accordingly, although as a practical matter the facts which are sufficient to establish liability under one of these two theories will often be sufficient to establish liability under both, it is certainly theoretically possible to have one without the other, and an independent analysis should be made with respect to each. Beyond all of this, and in addition to what might be termed the “conventional” theories of liability under 10b-5(b) discussed above, the past two years have witnessed the development of a separate theory of securities law liability which may have application in this case. That development represents a variation of what has come to be known as the “fraud on the market” theory of liability, and is based upon subsections (a) and (c) of Rule 10b-5 rather than upon subsection (b). It was first articulated in Shores v. Sklar, 647 F.2d 462 (5th Cir.1981) (en banc), cert. den., - U.S. -, 103 S.Ct. 722, 74 L.Ed.2d 949 (1983), and provides for the imposition of liability when the defendants’ fraudulent scheme results in a security being placed on the market when that security is in fact so thoroughly tainted with fraud and so lacking in basic essentials that it would actually be, but for the fraud, unmarketable. According to this theory, a plaintiff who purchases such a security is relieved of pleading or proving reliance upon any defendant’s specific representations or omissions, and instead is required to prove only his reliance on the “integrity of the market” — that is, simply that he relied upon the fact that the security was offered on the market. Shores v. Sklar, supra at 468-72; Dekro v. Stern Bros. & Co., 540 F.Supp. 406, 410-11, 413 (W.D.Mo.1982); Frankel v. Wyllie & Thornhill, Inc., supra. A careful study of Shores, Dekro and Frankel suggests that there are three general elements involved in this form oí liability. The first and perhaps most critical element concerns the characteristics of the security itself. It must, obviously, be on the market — that is, available for purchase by the public through some medium which does not require direct communication between the plaintiff and either the issuer or a prior holder. Additionally, it must in fact be “unmarketable” — a security which is so lacking in basic essentials that, in the absence of the fraudulent scheme or plan involved, it would never have been issued or marketed at any price; a security which, by its mere presence on the market, . constitutes a fraud. There is a temptation to suggest that it must appear to the investing public to be “ordinary,” or “genuine,” but I judge that such a test proves more than is necessary; the essence of the liability here is that the very presence of the security on the market is itself an assurance to the public that it is “ordinary” or “genuine” in this sense. The second necessary element will require that the security have reached the market as the result of a fraudulent scheme or plan designed to effect that end. Presumably this will often involve fraudulent misrepresentations or omissions, in connection with one or more of the various steps required to market and sell the security; but that is not necessarily so, as for example where the fraudulent scheme is alleged to include all those involved in the marketing and selling process; and in any event, it is not necessary that those matters actually be communicated to the plaintiff. It is said, instead, that the focus must be upon the ultimate effect or result of the scheme, rather than upon the mechanisms used to accomplish it. Shores v. Sklar, supra. In theory, then, individual items of misrepresentation or omission become important only insofar as they may demonstrate the contours of the scheme or plan, and the extent of a defendant’s participation in it, and a traditional analysis of such items in terms of plaintiff’s “reliance” thereon is unnecessary. The truly fundamental requirement in this connection would thus seem to be simply in a defendant’s active participation in the scheme, accompanied by the necessary state of mind (scienter); viz active participation in causing the securities to be issued or marketed, knowing, or perhaps consciously and recklessly failing to discover, that those securities were so lacking in the basic essentials that they were not entitled to be marketed at all. The third element, such as it may be, does involve the plaintiff’s “reliance;” but as demonstrated in Shores, and articulated in Frankel, the “reliance” necessary here is not of the ordinary sort. It is, rather, simply plaintiff’s reliance upon “the integrity of the market” — that is, his reliance upon the ■ assumption that the securities would not be on the market .unless they were entitled to be marketed. As expressed in Shores, supra: “Bishop could prove that he made a general request to his broker to purchase industrial development bonds, that his actual purchases covered a number of different issues, and that he did not undertake to determine which among the issues then offered were the most prudent investments or to second-guess the underwriters in the price and coupon rate they set. His pleadings would permit him to show that he was willing to accept any marketable risk. If a municipal authority was willing to authorize the issuance of the Bond, and the underwriters were willing to pre