MEMORANDUM AND ORDER
EDWARD R. BECKER, District Judge.
This action is brought pursuant to section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and rule 10b-5 issued thereunder by the Securities and Exchange Commission. It comes before the Court on defendant Photo Motion Corporation's ("Photo Motion") pre-trial motion to dismiss, or, alternatively, for a more specific statement or for summary judgment.
The allegations in the complaint may be briefly summarized as follows:
Plaintiff's decedent loaned $50,000 to the American Institute of Science and Technology ("American Institute"). The loan was guaranteed by defendant Porter. As security for the guarantee, Porter pledged with plaintiff his shares of the capital stock of Photo Motion. Upon a default by the American Institute, the loan agreement was amended and additional security was pledged in the form of Photo Motion stock owned by defendant Baron. Upon further default, plaintiff's decedent attempted to sell the pledged shares of Photo Motion stock, and for the first time became aware that the shares could not be sold because there was a stop order against their transfer. It then appeared that the shares could not be transferred because they were originally issued in an unregistered transaction under section 4(2) of the Securities Act of 1933 to investors for investment purposes only. The stock certificates which were the subject of the pledge bore no legend indicating the nature of the restriction.
In support of its claim against Photo Motion, plaintiff alleges in paragraph 33 of the complaint that "defendants":
"by use of the means and instrumentalities of interstate commerce and of the mails, placed into commerce deceptive devices and contrivances, namely, the shares in question, consisting and operating as a fraud and deceit upon plaintiff in violation of Section 10(b) of the Act and Rule 10b-5 issued thereunder."