A special fact has been defined as a "fact or condition enhancing the value of the stock, known by the officer or officers, not known by the stockholder, and not to be ascertained by an inspection of the books."

To satisfy the "special facts" requirement, a plaintiff generally must point to knowledge of a substantial transaction, such as an offer for the whole company.

—special facts include events increasing the value of a corporation's stock that are known by the insider, yet unknown and unascertainable from inspection of corporate books by selling shareholders

"In determining what constitutes fraud in the sale of stock, the general principles on the subject of fraud are to be applied." 12 FLETCHER, CYc. CoRP. §§ 5580, 5581 (1932).

The district court did not specifically decide whether Michigan law or Indiana law was controlling, for it held that appellants' evidence was insufficient to establish fraud under the case law in either jurisdiction. We agree.

This recession has taken the form of saying, for example, that once a corporate director has started making disclosure with respect to his inside information, he must continue making those disclosures.

One court went so far as to require disclosure of all facts which might affect the value of the stock.

—where the selling shareholder indicated he was placing trust in the purchasing officer by asking questions about the value of the shares, and the insider responded with only part of the facts.

The principle thus established is supported by an imposing weight of authority in other jurisdictions.

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