dissenting:
In straining to reach a sympathetic result, the majority overlooks a fundamental *717principle of causation which has long prevailed under the common law of fraud and which has been applied to comparable claims brought under the federal securities acts. This is, quite simply, that the injury averred must proceed directly from the wrong alleged and must not be attributable to some supervening cause. This elementary rule precludes recovery in the case at bar since Kohn’s misrepresentations as to his qualifications as a broker in no way caused the decline in the market value of the stocks he promoted.
I share my colleagues’ condemnation of Kohn’s misconduct and express no view as to whether recourse may lie in an appropriate court under a theory more feasible than the one advanced by plaintiffs. In approving Kohn’s present sanction, however, the majority is more righteous than right, for its decision abandons the traditional understanding of causation in the context of the sale of securities induced through misrepresentation, disregards governing precedent and extends the reach of Section 10(b) beyond that of its common law antecedent to provide for recovery in cases in which federal policies are offended by such expansion. Accordingly, I respectfully dissent.
The essential facts are undisputed and bear but brief recapitulation. While a trainee at the brokerage firm of Wood, Walker & Co., Kohn deceitfully held himself out to be a registered representative and “portfolio management specialist.” Trading upon those non-existent credentials,1 he persuaded Marbury Management and its principal shareholder, Bader, to purchase several highly speculative stocks. Contrary to a New York Stock Exchange rule requiring that purchase orders placed by novices be reviewed and approved by licensed brokers, Wood, Walker processed these orders without the necessary clearance. Despite Kohn’s sincere belief in the bright prospects of each of these investments, their market value plummeted. The precise timing of their decline and the reasons therefor are not apparent from the record; it suffices for present purposes to note that Kohn’s exaggeration of his expertise played no role in the economic collapse of the various stocks he had touted.
Under these circumstances, no recovery may be had against either Kohn or Wood, Walker under Section 10(b) since it is patent that the essential element of causation was not and could not be established as a matter of law. While it is true that Kohn’s misrepresentations may have been a precondition of the ensuing injury in that the investments might not have been made had he revealed his lack of qualifications, those misstatements nevertheless do not constitute the legal cause of the subsequent pecuniary loss and consequently will not suffice to establish an actionable fraud.2
From time immemorial proof of proximate cause — the legal link between the misconduct alleged and the injury averred— *718has been a precondition of recovery under theories of fraud and deceit. It is axiomatic that fraudulent misrepresentations are not actionable where the subsequent injury is due to an intervening or supervening cause. As applied to the sale of stock precipitated by misstatements, these principles of causation are satisfied only where the misrepresentation touches upon the reasons for the investment’s decline in value. Thus, where one is induced to purchase securities in reliance upon a claim which, however deceitful, is immaterial to the operative reason for the pecuniary loss, recovery under a theory of fraud is precluded by the inability to prove the requisite causation.3 See, e. g., Hotaling v. A. B. Leach & Co., 247 N.Y. 84, 87, 159 N.E. 870, 871 (1928) (“The plaintiff should be entitled to recover from the defendants the loss which is the proximate result of the fraud that induced the investment; the defendants should not be held liable for any part of plaintiff’s loss caused by subsequent events not connected with such fraud.”); Abel v. Paterno, 245 App. Div. 285, 281 N.Y.S. 58 (1st Dept. 1935); People v. S. W. Straus & Co., 156 Misc. 642, 282 N.Y.S. 972 (Sup.Ct. Kings Cty. 1935).4 Prosser categorically states:
. if false statements are made in connection with the sale of corporate stock, losses due to a subsequent decline of the market, or insolvency of the corporation, brought about by business conditions or other factors in no way related to the representations, will not afford any basis for recovery. It is only where the fact misstated was of a nature calculated to bring about such a result that damages for it can be recovered.
Prosser, Law of Torts H 110 at 732 (4th ed.) (footnotes omitted).
The rationale for this exacting standard of causation is quite simply that one should be held liable only for the foreseeable consequences of one’s action. Where the purchase of stock is induced through a misrepresentation, one is chargeable only for the consequences flowing from that statement; one does not thereby become an insurer of the investment, responsible for an indefinite period of time for any and all manner of unforeseen difficulties which may eventually beset the stock. This Court has previously remarked upon the necessity of thus restricting “the potentially limitless thrust of Rule 10b-5 to those situations in which there exists a causation in fact between the act and injury.” Titan Group, Inc. v. Faggen, 513 F.2d 234, 239 (2d Cir.), cert. denied, 423 U.S. 840, 96 S.Ct. 70, 46 L.Ed.2d 59 (1975). See also Globus v. Law Research Service, Inc., 418 F.2d 1276, 1292 (2d Cir. 1969), cert. denied, 397 U.S. 913, 90 S.Ct. 913, 25 L.Ed.2d 93 (1970) (“causation must be proved else defendants could be held liable to all the world”); List v. Fashion Park, Inc., 340 F.2d 457, 463 (2d Cir.), cert. denied, 382 U.S. 811, 86 S.Ct. 23,15 L.Ed.2d 60 (1965) (Rule 10b-5 does not “establish a scheme of investors’ insurance”). The Restatement (2d) of Torts takes a similar *719view. Discussing the situation in which the financial condition of a company has been misrepresented to the purchaser of stock the authors conclude:
there is no liability when the value of the stock goes down after the sale, not in any way because of the misrepresented financial condition, but as a result of some subsequent event that has no connection with or relation to its financial condition. There is, for example, no liability when the shares go down because of the sudden death of the corporation’s leading officers. Although the misrepresentation has in fact caused the loss, since it has induced the purchase without which the loss would not have occurred, it is not a legal cause of the loss for which the maker is responsible.
Restatement (2d) of Torts § 548A at 107 (1977).5
Although the term causation is not itself used in Section 10(b) or Rule 10b-5, it has never been doubted that it is an essential element of a claim brought thereunder. This belief is based on the statute’s common law ancestry, upon Section 28(a) of the Securities Exchange Act, 15 U.S.C. § 78bb, which limits recoveries to “actual damages on account of the act complained of,” and upon case law, most notably Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-54, 92 S.Ct. 1456, 1472, 31 L.Ed.2d 741 (1972), which recognized “the requisite element of causation in fact,” and Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6,12-13, 92 S.Ct. 165, 168-169, 30 L.Ed.2d 128 (1971), wherein reference is made to the requirement that the defrauded party must suffer an injury as a result of the deceptive practice. See also Titan Group, Inc. v. Faggen, supra, 513 F.2d at 239 (“causation remains a necessary element in a private action for damages under Rule 10b-5.”); Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F.2d 228, 238 (2d Cir. 1974) (“We have consistently held that causation is a necessary element of a private action for damages under Rule 10b-5.”); compare Chasins v. Smith, Barney & Co., 438 F.2d 1167, 1172 (2d Cir. 1970) (“the test is properly one of tort ‘causation in fact’ ”), with Globus v. Law Research Service, Inc., supra, 418 F.2d at 1291-92 (“there was sufficient evidence to support a finding of causal relationship between the misrepresentation and the losses appellees incurred when they sold.”).
Mere factual causation however is not enough. Causation in cases under the securities acts is governed by the principle, set forth above, that the loss complained of must proceed directly and proximately from the violation claimed and not be attributable to some supervening cause. Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 51, 97 S.Ct. 926, 954, 51 L.Ed.2d 124 (1977) (Blackmun, J., concurring). While this rule is easily stated, its application to cases brought under the federal statutes has frequently been problematic since in such cases both the violation and the resulting loss must each be linked with the requirement of a securities transaction, whether it be a *720purchase or sale as would be the case in an action under Section 10(b), or the exercise of the shareholder’s franchise, as would be the case in an action under Section 14.
That is, the .violation must have precipitated the securities decision (be it a purchase or sale or a shareholder’s vote), a requirement denominated as “transaction causation,” and the victim’s injury must also be proven to have derived from that same securities decision, a requirement somewhat ambiguously termed “loss causation,” Schlick v. Penn-Dixie Cement Corp., 507 F.2d 374, 380-81 (2d Cir. 1974), cert. denied, 421 U.S. 976, 95 S.Ct. 1976, 44 L.Ed.2d 467 (1975).6 Attempts to prove the existence of each link in this somewhat elongated chain of causation have engendered considerable controversy. With respect to “transaction causation,” it was frequently contended, particularly in nondisclosure cases, that plaintiff’s course of action was in fact unaffected by the material omissions, and that this first link had not, therefore, been established. Such contentions have been rejected in several cases, see Mills v. Electric Auto-Lite Co., 396 U.S. 375, 385, 90 S.Ct. 616, 622, 24 L.Ed.2d 593 (1970), and Affiliated Ute Citizens v. United States, supra, 406 U.S. at 153-54, 92 S.Ct. at 1472; see also Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra, 495 F.2d at 238-40, which holds that in nondisclosure suits, transaction causation will be presumed when the matters withheld are material. See Piper v. Chris-Craft Industries, Inc., supra, 430 U.S. at 50-51, 97 S.Ct. at 953-954 (1977) (Blackmun, J., concurring). Similarly spirited defenses have also been raised with respect to the second link, as defendants have claimed that the injury was not occasioned by a securities transaction, or that the connection between those events was too attenuated to satisfy the loss causation requirement. See Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971); Vine v. Beneficial Finance Co., 374 F.2d 627 (2d Cir.), cert. denied, 389 U.S. 970, 88 S.Ct. 463, 19 L.Ed.2d 460 (1967); Hoover v. Allen, 241 F.Supp. 213, 230 (S.D.N.Y.1965). See also Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 480 F.2d 341, 401 (2d Cir. 1973) (Mansfield, J., concurring and dissenting).
In my view, these cases do not undercut the requirement that a single, direct causal chain run uninterrupted from the alleged violation through a securities transaction to a demonstrable injury. In resolving the technical problems of establishing transaction or loss causation, the courts have refused to create insuperable barriers to the demonstration of their existence, and in appropriate situations have allowed the element of causation to be demonstrated through resort to related notions such as reliance or materiality. Nevertheless, in facilitating the proof of causation, the courts have never renounced the element itself, and have .never departed from the rudimentary principle 'that causation will not be found to exist where there is lacking a *721single, logical procession from the violation to the injury.
On the contrary, the courts have consistently denied recovery of damages in situations, such as the present case, where the effect of the misrepresentation is merely to place a victim in a vulnerable position which subsequently leads to his injury due to a supervening event. For example, in Oleck v. Fischer, CCH [1979 Transfer Binder] Fed.Sec.L.Rep. 1196,898 (S.D.N.Y.1979), aff’d, No. 79-7513 (2d Cir. June 4, 1980), plaintiffs after reading defendant’s prospectus sold it their business in exchange for promissory notes payable over time. The prospectus projected a favorable image of defendant’s financial condition, due in part to a misrepresentation of the collectibility of a substantial debt owed defendant by a third party. That obligation was in fact defaulted upon, defendant underwent a financial collapse, and plaintiffs never received payment on their notes. The district court denied relief against the defendant or its independent accountant, however, since it held that the misrepresentation was not the operative cause for defendant’s demise and plaintiffs consequent losses, which were in fact due to defendant’s catastrophic losses in certain coal mining ventures which could not have been offset even if the debt had been fully discharged. Consequently, recovery was denied, inter alia, on the grounds that causation had not been established.
Again, in Miller v. Schweickart, 413 F.Supp. 1062 (S.D.N.Y.1976), a brokerage firm for several years engaged in an allegedly illicit arrangement with the Skelly Oil Company involving the sale and repurchase of bonds. Two years after this relationship had' ceased, the brokerage firm went bankrupt, and its limited partners, who had allegedly invested due to the favorable financial picture made possible by the bond dealings, brought an action under the securities acts against the firm’s general partners and Skelly. Finding that the brokerage firm’s financial collapse was due to developments other than the consequences of the sale-repurchase agreement, Judge Weinfeld granted Skelly’s motion for summary judgment, stating:
To accept plaintiffs’ theory would extend liability for fraud beyond the immediate and foreseeable consequences of one’s wrongdoing and in effect make Skelly the permanent accomplice of the Schweickart general partners in all their subsequent parking transactions with others; it would subject Skelly to strict liability for any future depredations by those general partners long after Skelly had ceased to have any dealings with Schweickart, even for deeds done with others years later, of which Skelly had no knowledge. This is causation run riot.
413 F.Supp. at 1068.7
This fundamental principle of causation is equally well illustrated in the context of cases arising under Section 14. In Mills v. Electric Auto-Lite Co., supra, the Supreme Court held that where proxies are obtained *722through the use of misleading solicitations, a damage action under Section 14 will lie to recover for harms later visited upon the corporation only if that resulting injury flowed from the corporate action for which shareholder approval had been sought:
Where there has been a finding of materiality, a shareholder has made a sufficient showing of causal relationship between the violation and the injury for which he seeks redress if, as here, he proves that the proxy solicitation itself was an essential link in the accomplishment of the transaction.
Id. 396 U.S. at 385, 90 S.Ct. at 622.8
Where the misleading proxy solicitation is merely a first step which ultimately results in losses from an unrelated or supervening cause, relief cannot be obtained under Section 14. Weisberg v. Coastal States Gas Corp., 609 F.2d 650, 654 (2d Cir. 1979), petition for cert. filed, 48 U.S.L.W. 3619 (U.S. Feb. 5, 1980); Maldonado v. Flynn, 597 F.2d 789, 795-96 (2d Cir. 1979); see also Galef v. Alexander, 615 F.2d 51, 65-66 (2d Cir. 1980). For example, if corporate officers are elected through solicitations which failed to disclose a material lack of qualifications, and those improperly elected officers subsequently proceed to harm the corporation and its shareholders through acts of deceit, waste or mismanagement which were not themselves authorized by the proxies, a suit to permit recovery of resultant damages will not be permitted. See, e. g., Limmer v. General Telephone and Electronics Corp., CCH [1977-78 Transfer Binder] Fed.Sec.L. Rep. H 96,111 (S.D.N.Y.1977); Levy v. Johnson, CCH [1976-77 Transfer Binder] Fed. Sec.L.Rep. H 95,899 (S.D.N.Y.1977).9
Essentially the same situation is presented by the case at bar. But for Kohn’s misrepresentation of his expertise, plaintiffs might not have purchased the ill-fated stocks which he touted. Like the improper election of incompetent or larcenous officers, his misconduct was a precondition of the eventual loss. But since the actual damage in both cases stemmed from supervening events unrelated to the misstatements that induced the transactions, the chain of causation has been broken and recovery may not be had.
It might only be added that there seems to be no policy justification for the refusal to give effect to the traditional standard of causation. The mission of Section 10(b) is to give persons dealing in securities equal access to information so that informed investment decisions may be made. J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). It is debatable whether today’s decision will further that goal since Kohn’s dereliction was not in withholding or misstating data material to the merits of the investments he recommended, but only as to his expertise in promoting them.
*723On the other hand, repudiation of the traditional standard of causation will effectively thwart the oft-repeated goal of confining claims of corporate waste and mismanagement to the state courts which have the principal, if not exclusive, responsibility for such matters. Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 479, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977); Cort v. Ash, 422 U.S. 66, 84, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975); Superintendent of Insurance v. Bankers Life & Casualty Co., supra, 404 U.S. at 12, 92 S.Ct. at 169 (“Congress by § 10(b) did not seek to regulate transactions which constitute no more than internal corporate mismanagement.”). Under the causation test promulgated today the federal courts will be obliged to entertain suits brought by parties claiming to have been fraudulently induced to purchase stock which subsequently declined in value due to ineptitude, poor judgment or neglect. These are precisely the types of cases which this Court has refused to entertain, and yet, today’s holding will open a back door to the federal courthouse for these same cases which have historically been left to state adjudication.
The majority offers no compelling rationale for its refusal to abide by the acknowledged standard of causation. It is emphasized that the misrepresentation in issue not only prompted the initial purchase but was later repeated so as to cause the retention of the stocks. This observation has no bearing on the principle governing this action. First, the trial judge did not make such a factual finding, and I do not believe that it can be “implied” from the opinion below. Factual support for such an approach appears to be lacking, since it may have been that Kohn’s stocks all went into an immediate tailspin after their purchase by plaintiffs, and that they simply remained in this sorry state, or perhaps even revived somewhat, following Kohn’s subsequent misrepresentations.10 More significantly, this* claim even if supported by the record would not supply the missing element of causation. The fact that the defrauded parties
Because I view the causation issue as dispositive I would not consider whether it is permissible or advisable for this Court to formulate on plaintiffs’ behalf theories of Wood, Walker’s liability which were not averred in the pleadings, actively litigated or resolved by the trial court, see Opinion of the District Court, 470 F.Supp. 509, 515 n.ll. Consequently, I intimate no view on the merits of those issues.
The judgment as to Wood, Walker should be affirmed and as to Kohn, reversed.
. Plaintiffs also averred that Kohn falsely represented to them that he based his investment advice on “inside information.” As to these claims, the trial court found, and it is not disputed here, that the statements were merely non-actionable projections.
. Since the injury in the instant case derived from the unanticipated decline in the market value of the stocks Kohn had promoted, the situation is distinguishable from that presented in Competitive Associates, Inc. v. Laventhol, Krekstein, Horwath & Horwath, 516 F.2d 811 (2d Cir. 1975). There, plaintiff mutual fund alleged that it had been defrauded by an investment advisory firm which after obtaining the fund’s business deliberately proceeded to loot the assets placed under its supervision through unlawful investment. The mutual fund thereafter sued the independent auditors who had certified the advisor’s extremely favorable, but false, financial statement, alleging that the misimpression gained from that document led the fund to retain the larcenous advisor.
In contrast to the instant case, Competitive Associates, in which we reversed a summary judgment in favor of the defendants, involved an alleged scheme which provided a direct connection between the wrong and the injury, uninterrupted by any intervening, independent cause. Thus, in that case a fraudulent scheme to pilfer the mutual fund was already afoot at the time of the violation, and the plaintiffs losses were inevitable upon the advisor’s procurement of the account. The case at bar involves no such scheme, and plaintiffs’ losses were certainly not intended by Kohn at the time he gained their account.
. Under the securities statutes, liability is limited by principles of causation even where the plaintiff is aided by a presumption in his favor. For example, under Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, which proscribes false or misleading representations in registration statements, a plaintiff may recover the difference between the purchase price of a security and its market value at the time of the filing of his suit, without having to establish a causal connection between the false statement and the decline of the stock. However, the courts have permitted a reduction in damages to the extent that defendants can prove that the loss of value is due to reasons unrelated to the matters misrepresented in the registration statement. See Feit v. Leasco Data Processing Equipment Corp., 332 F.Supp. 544, 584-88 (E.D.N.Y.1971), and see footnote 7, infra.
. I respectfully suggest that the authorities cited by the majority in support of its broad notion of causality in fraud cases involving the sale of stock, many of them decided before the current federal securities laws were enacted and many involving the sale of tangibles, do not conflict with the more restrictive standard suggested here. For example, in Hotaling v. A. B. Leach & Co., 247 N.Y. 84, 159 N.E. 870 (1928), Judge Lehman permitted recovery, but specifically noted, “The loss sustained is directly traceable to the original misrepresentation of the character of the investment the plaintiff was induced to make.” Id. at 93, 159 N.E. at 873.
. The proposed ALI Federal Securities Code takes the same approach to the question of causation:
when the market declines after the published rectification of a false earnings statement that was used in the sale of an electronics stock, the misrepresentation is not the “legal cause” of the buyer’s loss, or at any rate not the sole legal cause, to the extent that a subsequent event that had no connection with or relation to the misrepresentation occurred — for example, the sudden death of the corporation’s president or a softening of the market in all electronics stocks. See Feit v. Leasco Data Processing Equipment Corp., 332 F.Supp. 544, 586-88 (E.D.N.Y.1971), 47 Ind.L.J. 367 (1972). . . .
[] That is to say, the basic distinction between reliance and legal cause bears emphasizing, because the two concepts are so frequently blurred: A buyer can have relied on a seller’s misstatement of a material fact in deciding to buy; but, if the general market drops precipitately the next day on news of a political assassination or an invasion in some part of the world, the buyer’s loss is caused not by the misstatement (except in the “but for” or post hoc propter hoc sense) but by the disastrous political news.
Tentative Draft # 2, § 215A at 5 (1973). (Commentary on § 220 of the Proposed Official Draft (1978)).
. “Loss causation,” as the term is used in Schlick v. Penn-Dixie Cement Corp., 507 F.2d 374, 380 82 (2d Cir. 1974), cert. denied, 421 U.S. 976, 95 S.Ct. 1976, 44 L.Ed.2d 467 (1975), may mean nothing more than the proposition advanced here, that the injury must be proximately caused by the precise violation alleged. Thus, the Court noted that in order to recover in cases charging fraudulent misrepresentation or omissions,
[Tjhere would have to be a showing of both loss causation — that the misrepresentations or omissions caused the economic harm— and transaction causation — that the violation in question caused the appellant to engage in the transaction in question.
507 F.2d at 380 (emphasis in original; footnote omitted). However, most commentators have construed this term to connote the necessary causal nexus between the securities transaction and the injury, rather than the requisite connection between the violation and the injury. See, e. g., Jennings & Marsh, Securities Regulation at 1068 ■69 (4th ed. 1977). Judge Frankel, concurring in the result in Schlick, expressed reluctance about the phrase coined, see 507 F.2d at 384, and other courts have been noticeably reluctant expressly to adopt this language. See, e. g., Moody v. Bache & Co., Inc., 570 F.2d 523, 527 n.7 (5th Cir. 1978); St. Louis Union Trust Co. v. Merrill Lynch, Pierce Fenner & Smith, Inc., 562 F.2d 1040, 1048 mil (8th Cir. 1977), cert. denied, 435 U.S. 925, 98 S.Ct. 1490, 55 L.Ed.2d 519 (1978).
. The standard of causation espoused here is ° also implicit in the manner of calculating damages in cases successfully prosecuted under Section 10(b). Generally, plaintiffs will be awarded the difference between their purchase price and sale price, with an adjustment for that portion of their loss which is attributable to factors other than those concealed or misrepresented such as a general market decline. Rolf v. Blyth, Eastman Dillon & Co., Inc., 570 F.2d 38, 48 50 (2d Cir.), cert. denied, 439 U.S. 1039, 99 S.Ct. 642 (1978). But see Clark v. John Lamula Investors, Inc., 583 F.2d 594, 803-04 (2d Cir. 1978). See also Bonime v. Doyle, 416 F.Supp. 1372 (S.D.N.Y.1976), aff'd, 556 F.2d 554 (2d Cir. 1977), where the district court approved the settlement of a class action securities fraud suit over objection that the recovery was too meager, noting that while the stock purchases may have been fraudulently induced, the damages might in large measure have been attributable to other causes unrelated to the alleged misstatements. In rejecting a more lucrative method of computing damages, Judge Lasker stated:
It therefore has the potential of creating a windfall recovery to a plaintiff in the nature of indemnification against the risks of the vicissitudes of the market, and at the same time saddling defendants with payments far out of proportion to the damage caused by their fraud.
416 F.Supp. at 1384. See also Federman v. Empire Fire and Marine Ins. Co., 74 F.R.D. 151 (S.D.N.Y.1976), rev’d in part on other grounds, 597 F.2d 798 (2d Cir. 1979).
. In Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970), shareholders of Auto-Lite alleged that the corporation’s directors had violated Section 14 by soliciting proxies for approval of a merger with Mergenthaler Linotype Co. without disclosing in the proxy materials that they were nominees of Mergenthaler. The Court held inter alia that there was no need to demonstrate a connection between the precise misstatement and the ultimate harm, that is, there was no need to establish that the allegedly unfair merger terms were arrived at because of the split allegiance of the directors. Plaintiffs were required to demonstrate only that the shareholders’ acquiescence in the plan had been unlawfully obtained:
a shareholder has made a sufficient showing of causal relationship between the violation and the injury for which he seeks redress if, as here, he proves that the proxy solicitation itself, rather than the particular defect in the solicitation materials, was an essential link in the accomplishment of the transaction.
396 U.S. at 385, 90 S.Ct. at 622. This rule does not mandate a relaxation in the standard of causation suggested here since the violation in Mills lay not in the directors’ advising approval of the merger, but in the procurement of shareholder acceptance of the plan through a failure to reveal that their ostensibly loyal directors who were recommending the proposal, were in fact corporate double agents.
. See also, Rediker v. Geon Industries, Inc., 464 F.Supp. 73, 82 (S.D.N.Y.1978); Kerrigan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 450 F.Supp. 639, 643 (S.D.N.Y.1978); Maldonado v. Flynn, 448 F.Supp. 1032, 1040 (S.D.N.Y.1978), aff’d in pertinent part, 597 F.2d 789 (2d Cir. 1979); Morgan v. Prudential Funds, Inc., 446 F.Supp. 628, 633 (S.D.N.Y.1978); Goldberger v. Baker, 442 F.Supp. 659, 666 (S.D.N.Y.1977).
. The only testimony on the subject concerns the stock prices on the date of purchase, the retained their stock after a reprise of Kohn’s deception is no more the cause of the stock’s loss of value than was Kohn’s initial misrepresentation. date of Kohn’s unmasking and the date of sale.