MEMORANDUM OPINION AND ORDER
ILANA DIAMOND ROVNER, UNITED STATES DISTRICT JUDGE
Plaintiff in this putative class action
challenges the failure of directors and officers of UAL Corporation to immediately make public the alleged receipt of a takeover proposal from investor Marvin Davis on August 1, 1989. On August 4, 1989, plaintiff sold UAL stock on the open market for a price of approximately $ 170 per share. The takeover proposal was made public on August 7, 1989, and the price of UAL stock rose $ 46.25 per share before the end of that day. Plaintiff alleges that defendants' failure to disclose the offer immediately violated section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. 140.10b-5 (collectively, "§ 10(b)"). Pending is defendants' motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6).
In order to recover under § 10(b), plaintiff must show that defendants made "statements [which] were misleading as to a material fact." Basic Inc. v. Levinson, 485 U.S. 224, 238, 108 S. Ct. 978, 986, 99 L. Ed. 2d 194 (1988) (emphases in original). In this case, plaintiff does not argue that defendants made misleading statements; rather, he claims that defendants' silence violates § 10(b). Silence, however, is not "misleading" unless there is a separate duty to disclose. Id. at 239 n.17, 987 n.17. See also Barker v. Henderson, Franklin, Starnes & Holt, 797 F.2d 490, 495 (7th Cir. 1986). Such a duty to disclose may arise where disclosure is necessary to make other statements not misleading, Taylor v. First Union Corporation, 857 F.2d 240, 243-44 (4th Cir. 1988), cert. denied, 489 U.S. 1080, 109 S. Ct. 1532, 103 L. Ed. 2d 837 (1989), where those who possess relevant information trade in the stock, Chiarella v. United States, 445 U.S. 222, 228-29, 100 S. Ct. 1108, 1114-15, 63 L. Ed. 2d 348 (1980); Gert v. Elgin National Industries, Inc., 773 F.2d 154, 158-59 (7th Cir. 1985), or where the company is responsible for rumors or unusual market activity, State Teachers Retirement Board v. Fluor Corp., 654 F.2d 843, 850 (2d Cir. 1981); Etshokin v. Texas Gulf, Inc., 612 F. Supp. 1212, 1216 (N.D. Ill. 1984). In the absence of some such circumstance, there is no general duty to disclose information: "There can be no fraud absent a duty to speak . . . . [A] duty to disclose under § 10(b) does not arise from the mere possession of nonpublic market information." Chiarella, 445 U.S. at 235, 100 S. Ct. at 1118. See also DiLeo v. Ernst & Young, 901 F.2d 624, 628 (7th Cir. 1990) ("the securities laws do not impose general duties to speak"), cert. denied, 498 U.S. 941, 112 L. Ed. 2d 312, 111 S. Ct. 347 (1990). The First Circuit's discussion in Roeder v. Alpha Industries, Inc., 814 F.2d 22 (1st Cir. 1987), applies equally to this case:
[Plaintiff] claims that a corporation has an affirmative duty to disclose all material information even if there is no insider trading, no statute or regulation requiring disclosure, and no inaccurate, incomplete or misleading prior disclosures. The prevailing view, however, is that there is no such affirmative duty of disclosure.