Santa Fe Industries, Inc. v. Green 430 U.S. 462 (1977) Santa Fe owned 95% of a corporation called Kirby. In order to get the last 5%, they attempted a short form merger. Under Delaware Corporation Law §253, a parent corporation that owns at least 90% of a subsidiary can, with the approval of the directors of the parent, merge with the subsidiary and cash out the remaining shareholders. Santa Fe hired some appraisers to determine the value of Kirby. The appraisers figured Kirby was worth $125 a share. Santa Fe offered the minority shareholders $150 a share. Some of the minority shareholders (led by Green) sued to block the merger. Green argued that the true value of the stock was $772 a share, and that Santa Fe had fraudulently appraised it. Green argued that this fraud was a violation of the Securities Exchange Act of 1934 Rule 10b-5. Green also argued that the merger itself was a violation of Rule 10b-5 because it was accomplished without any corporate purpose and without prior notice to minority shareholders. The Trial Court found for Santa Fe. Green appealed. The Trial Court found that Green didn't make a reasonable case that the stock was significantly undervalued. The Appellate Court reversed. Santa Fe appealed. The Appellate Court agreed that Green did not make a reasonable case that the stock was undervalued. However, The Court found that any breach of fiduciary duty by a majority of shareholders against the minority could be a violation of Rule 10b-5, even without a charge of fraud or misrepresentation. The US Supreme Court reversed. The US Supreme Court found that Rule 10b-5 only prohibits conduct involving manipulation and deception. The Court found that Rule 10b-5 was only designed to ensure full disclosure, it wasn't designed to be used the way Green was trying to use it. The Court found that Green's claims were a matter of State law, not Federal law.