More than twenty years have now elapsed since a private right of action under rule 10b-5 was first recognized judicially. In the interim, rule 10b-5 has become "the most prolific source of litigation since Henry Ford invented the flivver." And, the Rule is assuming even greater importance. Private actions under 10b-5 in excess of seventy-seven million dollars have been instituted against Texas Gulf Sulphur and its officers and directors. The Securities and Exchange Commission proposals to implement the Wheat Report will result in an increased emphasis on 10b-5. Notwithstanding the importance of rule 10b-5 and the numerous reported decisions and legal writings devoted to it and its nuances, serious questions remain largely unanswered, particularly with regard to the elements of a private action under the Rule. This article will treat one such question : the role of scienter in a private action under rule 10b-5 for misrepresentations in the sale of securities.

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