Securities laws were obviously not intended for a mediation context. Innocent investors buying stock from an issuer presumably trust that the issuer will be tru

Securities laws were obviously not intended for a mediation context. Innocent investors buying stock from an issuer presumably trust that the issuer will be truthful about the value of the stock and about the material facts that affect that value. No such trust exists in an adversarial context where it is presumed that, in negotiating deals, it is every man for himself. Moreover, if securities laws applied in this context, then parties would need to do Regulation D/blue sky compliance to ensure that they were not sued after-the-fact. This is wholly impractical and would basically negate the ability of parties to settle by offering stock or other forms of equity to one another. In all the many years since the U.S. securities laws were enacted back in the early 1930s, these laws have never been applied in the manner suggested by the Winklevoss brothers. Since the issue is one of what Congress intended in enacting those laws, the failure of anyone even to raise the issue for so long a time is a good indicator that Congress never intended them to apply to this context.