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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
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SUPREME COURT OF THE UNITED STATES
--------
No. 93-404
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ARTHUR L. GUSTAFSON, et al., PETITION-
ERS v. ALLOYD COMPANY, INCORPO-
RATED fka ALLOYD HOLDINGS,
INCORPORATED, et al.
on writ of certiorari to the united states court
of appeals for the seventh circuit
[February 28, 1995]

  Justice Kennedy delivered the opinion of the Court.
  Under 12(2) of the Securities Act of 1933 buyers have
an express cause of action for rescission against sellers
who make material misstatements or omissions -by
means of a prospectus.-  The question presented is
whether this right of rescission extends to a private,
secondary transaction, on the theory that recitations in
the purchase agreement are part of a -prospectus.-

                            I
  Petitioners Gustafson, McLean, and Butler (collectively
Gustafson) were in 1989 the sole shareholders of Alloyd,
Inc., a manufacturer of plastic packaging and automatic
heat sealing equipment.  Alloyd was formed, and its
stock was issued, in 1961.  In 1989, Gustafson decided
to sell Alloyd and engaged KPMG Peat Marwick to find
a buyer.  In response to information distributed by
KPMG, Wind Point Partners II, L. P., agreed to buy
substantially all of the issued and outstanding stock
through Alloyd Holdings, Inc., a new corporation formed
to effect the sale of Alloyd's stock.  The shareholders of
Alloyd Holdings were Wind Point and a number of
individual investors.
  In preparation for negotiating the contract with
Gustafson, Wind Point undertook an extensive analysis
of the company, relying in part on a formal business
review prepared by KPMG.  Alloyd's practice was to
take inventory at year's end, so Wind Point and KPMG
considered taking an earlier inventory to use in deter-
mining the purchase price.  In the end they did not do
so, relying instead on certain estimates and including
provisions for adjustments after the transaction closed.
  On December 20, 1989 Gustafson and Alloyd Holdings
executed a contract of sale.  Alloyd Holdings agreed to
pay Gustafson and his coshareholders $18,709,000 for
the sale of the stock plus a payment of $2,122,219,
which reflected the estimated increase in Alloyd's net
worth from the end of the previous year, the last period
for which hard financial data were available.  Article IV
of the purchase agreement, entitled -Representations and
Warranties of the Sellers,- included assurances that the
company's financial statements -present fairly . . . the
Company's financial condition- and that between the
date of the latest balance sheet and the date the
agreement was executed -there ha[d] been no material
adverse change in . . . [Alloyd's] financial condition.-
App. 115, 117.  The contract also provided that if the
year-end audit and financial statements revealed a
variance between estimated and actual increased value,
the disappointed party would receive an adjustment.
  The year-end audit of Alloyd revealed that Alloyd's
actual earnings for 1989 were lower than the estimates
relied upon by the parties in negotiating the adjustment
amount of $2,122,219.  Under the contract, the buyers
had a right to recover an adjustment amount of
$815,000, from the sellers.  Nevertheless, on February
11, 1991, the newly formed company (now called Alloyd,
Co., the same as the original company) and Wind Point
brought suit in the United States District Court for the
Northern District of Illinois, seeking outright rescission
of the contract under 12(2) of the Securities Act of
1933.  Alloyd (the new company) claimed that state-
ments made by Gustafson and his coshareholders
regarding the financial data of their company were
inaccurate, rendering untrue the representations and
warranties contained in the contract.  The buyers
further alleged that the contract of sale was a -prospec-
tus,- so that any misstatements contained in the
agreement gave rise to liability under 12(2) of the 1933
Act.  Pursuant to the adjustment clause, the defendants
remitted to the purchasers $815,000 plus interest, but
the adjustment did not cause the purchasers to drop the
lawsuit.
  Relying on the decision of the Court of Appeals for the
Third Circuit in Ballay v. Legg Mason Wood Walker,
Inc., 925 F. 2d 682 (1991), the District Court granted
Gustafson's motion for summary judgment, holding -that
section 12(2) claims can only arise out of the initial
stock offerings.-  App. 20.  Although the sellers were the
controlling shareholders of the original company, the
District Court concluded that the private sale agreement
-cannot be compared to an initial offering- because -the
purchasers in this case had direct access to financial and
other company documents, and had the opportunity to
inspect the seller's property.-  Id., at 21.
  On review, the Court of Appeals for the Seventh
Circuit vacated the District Court's judgment and
remanded for further consideration in light of that
court's intervening decision in Pacific Dunlop Holdings
Inc. v. Allen & Co. Inc., 993 F. 2d 578 (1993).  In
Pacific Dunlop the court reasoned that the inclusion of
the term -communication- in the Act's definition of
prospectus meant that the term prospectus was defined
-very broadly- to include all written communications
that offered the sale of a security.  Id., at 582.  Reject-
ing the view of the Court of Appeals for the Third
Circuit in Ballay, the Court of Appeals decided that
12(2)'s right of action for rescission -applies to any
communication which offers any security for sale . . .
including the stock purchase agreement in the present
case.-  993 F. 2d, at 595.  We granted certiorari to
resolve this Circuit conflict, 510 U. S. ___ (1994), and we
now reverse.

                           II
  The rescission claim against Gustafson is based upon
12(2) of the 1933 Act, 48 Stat. 84, as amended, 15
U. S. C. 77l(2).  In relevant part, the section provides
that any person who
-offers or sells a security (whether or not exempted
by the provisions of section 77c of this title, other
than paragraph (2) of subsection (a) of said section),
by the use of any means or instruments of transpor-
tation or communication in interstate commerce or
of the mails, by means of a prospectus or oral
communication, which includes an untrue statement
of a material fact or omits to state a material fact
necessary in order to make the statements, in the
light of the circumstances under which they were
made, not misleading (the purchaser not knowing of
such untruth or omission), and who shall not
sustain the burden of proof that he did not know,
and in the exercise of reasonable care could not
have known, of such untruth or omission,
-shall be liable to the person purchasing such
security from him, who may sue either at law or in
equity in any court of competent jurisdiction, to
recover  the consideration paid for such security
with interest thereon, less the amount of any income
received thereon, upon the tender of such security,
or for damages if he no longer owns the security.-
As this case reaches us, we must assume that the stock
purchase agreement contained material misstatements of
fact made by the sellers and that Gustafson would not
sustain its burden of proving due care.  On these
assumptions, Alloyd would have a right to obtain
rescission if those misstatements were made -by means
of a prospectus or oral communication.-  The parties
(and the courts of appeals) agree that the phrase -oral
communication- is restricted to oral communications that
relate to a prospectus.  See Pacific Dunlop, supra, 993
F. 2d, at 588; Ballay, supra, at 688.  The determinative
question, then, is whether the contract between Alloyd
and Gustafson is a -prospectus- as the term is used in
the 1933 Act.
  Alloyd argues that -prospectus- is defined in a broad
manner, broad enough to encompass the contract
between the parties.  This argument is echoed by the
dissents.  See post, at ___ (Thomas, J., dissenting); post,
at ___ (Ginsburg, J., dissenting).  Gustafson, by con-
trast, maintains that prospectus in the 1933 Act means
a communication soliciting the public to purchase securi-
ties from the issuer.  Brief for Petitioners 17-18.
  Three sections of the 1933 Act are critical in resolving
the definitional question on which the case turns: 2(10),
which defines a prospectus; 10, which sets forth the
information that must be contained in a prospectus; and
12, which imposes liability based on misstatements in
a prospectus.  In seeking to interpret the term -prospec-
tus,- we adopt the premise that the term should be
construed, if possible, to give it a consistent meaning
throughout the Act.  That principle follows from our
duty to construe statutes, not isolated provisions.  See
Philbrook v. Glodgett, 421 U. S. 707, 713 (1975);
Kokoszka v. Belford, 417 U. S. 642, 650 (1974).

                            A
  We begin with 10.  It provides, in relevant part:
      -Except to the extent otherwise permitted or re-
quired pursuant to this subsection or subsections (c),
(d), or (e) of this section-
      -(1) a prospectus relating to a security other than
a security issued by a foreign government or politi-
cal subdivision thereof, shall contain the information
contained in the registration statement . . . .
-(2) a prospectus relating to a security issued by a
foreign government or political subdivision thereof
shall contain the information contained in the
registration statement . . . .-  15 U. S. C. 77j.
Section 10 does not provide that some prospectuses must
contain the information contained in the registration
statement.  Save for the explicit and well-defined
exemptions for securities listed under 3, see 15
U. S. C. 77c (exempting certain classes of securities
from the coverage of the Act), its mandate is unquali-
fied: -a prospectus . . . shall contain the information
contained in the registration statement.-
  Although 10 does not define what a prospectus is, it
does instruct us what a prospectus cannot be if the Act
is to be interpreted as a symmetrical and coherent
regulatory scheme, one in which the operative words
have a consistent meaning throughout.  There is no
dispute that the contract in this case was not required
to contain the information contained in a registration
statement and that no statutory exemption was required
to take the document out of 10's coverage.  Cf. 15
U. S. C. 77c.  It follows that the contract is not a
prospectus under 10.  That does not mean that a
document ceases to be a prospectus whenever it omits a
required piece of information.  It does mean that a
document is not a prospectus within the meaning of that
section if, absent an exemption, it need not comply with
10's requirements in the first place.
  An examination of 10 reveals that, whatever else
-prospectus- may mean, the term is confined to a
document that, absent an overriding exemption, must
include the -information contained in the registration
statement.-  By and large, only public offerings by an
issuer of a security, or by controlling shareholders of an
issuer, require the preparation and filing of registration
statements.  See 15 U. S. C. 77d, 77e, 77b(11).  It
follows, we conclude, that a prospectus under 10 is
confined to documents related to public offerings by an
issuer or its controlling shareholders.
  This much (the meaning of prospectus in 10) seems
not to be in dispute.  Where the courts are in disagree-
ment is with the implications of this proposition for the
entirety of the Act, and for 12 in particular.  Compare
Ballay v. Legg Mason Wood Walker, Inc., 925 F. 2d, at
688-689 (suggesting that the term prospectus is used in
a consistent manner in both 10 and 12), with Pacific
Dunlop Holdings Inc. v. Allen & Co., 993 F. 2d, at 584
(rejecting that view).  We conclude that the term
-prospectus- must have the same meaning under 10
and 12.  In so holding, we do not, as the dissent by
Justice Ginsburg suggests, make the mistake of
treating 10 as a definitional section.  See post at ___
(Ginsburg, J., dissenting).  Instead, we find in 10
guidance and instruction for giving the term a consistent
meaning throughout the Act.
  The Securities Act of 1933, like every Act of Congress,
should not be read as a series of unrelated and isolated
provisions.  Only last term we adhered to the -normal
rule of statutory construction- that -identical words used
in different parts of the same act are intended to have
the same meaning.-  Department of Revenue of Oregon
v. ACF Industries, Inc., 510 U. S. ___, ___ (1994) (slip
op., at 9) (internal quotation marks and citations
omitted); see also Brooke Group Ltd. v. Brown & Wil-
liamson Tobacco Corp., 509 U. S. ___, ___ (1993) (slip
op., at 19); Atlantic Cleaners & Dryers, Inc. v. United
States, 286 U. S. 427, 433 (1932).  That principle applies
here.  If the contract before us is not a prospectus for
purposes of 10-as all must and do concede-it is not
a prospectus for purposes of 12 either.
  The conclusion that prospectus has the same meaning,
and refers to the same types of communications (public
offers by an issuer or its controlling shareholders), in
both 10 and 12 is reinforced by an examination of the
structure of the 1933 Act.  Sections 4 and 5 of the Act
together require a seller to file a registration statement
and to issue a prospectus for certain defined types of
sales (public offerings by an issuer, through an under-
writer).  See 15 U. S. C. 77d, 77e.  Sections 7 and 10
of the Act set forth the information required in the
registration statement and the prospectus.  See 77g,
77j.  Section 11 provides for liability on account of false
registration statements; 12(2) for liability based on
misstatements in prospectuses.  See 15 U. S. C. 77k,
77l.  Following the most natural and symmetrical
reading, just as the liability imposed by 11 flows from
the requirements imposed by 5 and 7 providing for the
filing and content of registration statements, the liability
imposed by 12(2), cannot attach unless there is an
obligation to distribute the prospectus in the first place
(or unless there is an exemption).
  Our interpretation is further confirmed by a reexami-
nation of 12 itself.  The section contains an important
guide to the correct resolution of the case.  By its terms,
12(2) exempts from its coverage prospectuses relating
to the sales of government-issued securities.  See 15
U. S. C. 77l (excepting securities exempted by
77c(a)(2)).  If Congress intended 12(2) to create
liability for misstatements contained in any written
communication relating to the sale of a security-includ-
ing secondary market transactions-there is no ready
explanation for exempting government-issued securities
from the reach of the right to rescind granted by 12(2).
Why would Congress grant immunity to a private seller
from liability in a rescission suit for no reason other
than that the seller's misstatements happen to relate to
securities issued by a governmental entity?  No reason
is apparent.  The anomaly disappears, however, when
the term -prospectus- relates only to documents that
offer securities sold to the public by an issuer.  The
exemption for government-issued securities makes perfect
sense on that view, for it then becomes a precise and
appropriate means of giving immunity to governmental
authorities.
  The primary innovation of the 1933 Act was the
creation of federal duties-for the most part, registration
and disclosure obligations-in connection with public
offerings.  See, e. g., Ernst & Ernst v. Hochfelder, 425
U. S. 185, 195 (1976) (the 1933 Act -was designed to
provide investors with full disclosure of material infor-
mation concerning public offerings-); Blue Chip Stamps
v. Manor Drug Stores, 421 U. S. 723, 752 (1975) (-The
1933 Act is a far narrower statute [than the Securities
Exchange Act of 1934 (1934 Act)] chiefly concerned with
disclosure and fraud in connection with offerings of
securities-primarily, as here, initial distributions of
newly issued stock from corporate issuers-); United
States v. Naftalin, 441 U. S. 768, 777-778 (1979) (-[T]he
1933 Act was primarily concerned with the regulation of
new offerings-); SEC v. Ralston Purina Co., 346 U. S.
119, 122, n. 5 (1953) (-`[T]he bill does not affect transac-
tions beyond the need of public protection in order to
prevent recurrences of demonstrated abuses'-), quoting
H. R. Rep. No. 85, 73d Cong., 1st Sess., 7 (1933).  We
are reluctant to conclude that 12(2) creates vast
additional liabilities that are quite independent of the
new substantive obligations the Act imposes.  It is more
reasonable to interpret the liability provisions of the
1933 Act as designed for the primary purpose of provid-
ing remedies for violations of the obligations it had
created.  Indeed, 11 and 12(1)-the statutory neighbors
of 12(2)-afford remedies for violations of those obliga-
tions.  See 11, 15 U. S. C. 77k (remedy for untrue
statements in registration statements); 12(1), 15
U. S. C. 77l(1) (remedy for sales in violation of 5,
which prohibits the sale of unregistered securities).
Under our interpretation of -prospectus,- 12(2) in
similar manner is linked to the new duties created by
the Act.
  On the other hand, accepting Alloyd's argument that
any written offer is a prospectus under 12 would
require us to hold that the word -prospectus- in 12
refers to a broader set of communications than the same
term in 10.  The Court of Appeals was candid in
embracing that conclusion: -[T]he 1933 Act contemplates
many definitions of a prospectus.  Section 2(10) gives a
single, broad definition; section 10(a) involves an
isolated, distinct document-a prospectus within a
prospectus; section 10(d) gives the Commission authority
to classify many.-  Pacific Dunlop Holdings Inc. v. Allen
& Co., 993 F. 2d, at 584.  The dissents take a similar
tack.  In the name of a plain meaning approach to
statutory interpretation, the dissents discover in the Act
two different species of prospectuses: formal (also called
10) prospectuses, subject to both 10 and 12, and
informal prospectuses, subject only to 12 but not to 10.
See post at ___ (Ginsburg, J., dissenting); see also post,
at ___ (Thomas, J., dissenting).  Nowhere in the statute,
however, do the terms -formal prospectus- or -informal
prospectus- appear.  Instead, the Act uses one term
--prospectus-- throughout.  In disagreement with the
Court of Appeals and the dissenting opinions, we cannot
accept the conclusion that this single operative word
means one thing in one section of the Act and something
quite different in another.  The dissenting opinions'
resort to terms not found in the Act belies the claim of
fidelity to the text of the statute.
  Alloyd, as well as Justice Thomas in his dissent,
respond that if Congress had intended 12(2) to govern
only initial public offerings, it would have been simple
for Congress to have referred to the 4 exemptions in
12(2).  See Brief of Respondents 25-26; post, at ___
(Thomas, J., dissenting).  The argument gets the
presumption backwards.  Had Congress meant the term
-prospectus- in 12(2) to have a different meaning than
the same term in 10, that is when one would have
expected Congress to have been explicit.  Congressional
silence cuts against, not in favor of, Alloyd's argument.
The burden should be on the proponents of the view
that the term -prospectus- means one thing in 12 and
another in 10 to adduce strong textual support for that
conclusion.  And Alloyd adduces none.

                            B
  Alloyd's contrary argument rests to a significant extent
on 2(10), or, to be more precise, on one word of that
section.  Section 2(10) provides that -[t]he term
`prospectus' means any prospectus, notice, circular,
advertisement, letter, or communication, written or by
radio or television, which offers any security for sale or
confirms the sale of any security.-  15 U. S. C. 77b(10).
Concentrating on the word -communication,- Alloyd
argues that any written communication that offers a
security for sale is a -prospectus.-  Inserting its defini-
tion into 12(2), Alloyd insists that a material misstate-
ment in any communication offering a security for sale
gives rise to an action for rescission, without proof of
fraud by the the seller or reliance by the purchaser.  In
Alloyd's view, 2(10) gives the term -prospectus- a
capacious definition that, although incompatible with
10, nevertheless governs in 12.
  The flaw in Alloyd's argument, echoed in the dissent-
ing opinions, post, at ___ (Thomas, J., dissenting; post,
at ___ (Ginsburg, J., dissenting), is its reliance on one
word of the definitional section in isolation.  To be sure,
2(10) defines a prospectus as, inter alia, a -communica-
tion, written or by radio or television, which offers any
security for sale or confirms the sale of any security.-
15 U. S. C. 77b(10).  The word -communication,-
however, on which Alloyd's entire argument rests, is but
one word in a list, a word Alloyd reads altogether out of
context.
  The relevant phrase in the definitional part of the
statute must be read in its entirety, a reading which
yields the interpretation that the term prospectus refers
to a document soliciting the public to acquire securities.
We find that definition controlling.  Alloyd's argument
that the phrase -communication, written or by radio or
television,- transforms any written communication
offering a security for sale into a prospectus cannot
consist with at least two rather sensible rules of statu-
tory construction.  First, the Court will avoid a reading
which renders some words altogether redundant.  See
United States v. Menasche, 348 U. S. 528, 538-39 (1955).
If -communication- included every written communica-
tion, it would render -notice, circular, advertisement,
[and] letter- redundant, since each of these are forms of
written communication as well.  Congress with ease
could have drafted 2(10) to read: -The term `prospectus'
means any communication, written or by radio or
television, that offers a security for sale or confirms the
sale of a security.-  Congress did not write the statute
that way, however, and we decline to say it included the
words -notice, circular, advertisement, [and] letter- for
no purpose.
  The constructional problem is resolved by the second
principle Alloyd overlooks, which is that a word is
known by the company it keeps (the doctrine of noscitur
a sociis).  This rule we rely upon to avoid ascribing to
one word a meaning so broad that it is inconsistent with
its accompanying words, thus giving -unintended breadth
to the Acts of Congress.-  Jarecki v. G. D. Searle & Co.,
367 U. S. 303, 307 (1961).  The rule guided our earlier
interpretation of the word -security- under the 1934 Act.
The 1934 Act defines the term -security- to mean, inter
alia, -any note.-  We concluded nevertheless that in
context -the phrase `any note' should not be interpreted
to mean literally `any note,' but must be understood
against the background of what Congress was attempt-
ing to accomplish in enacting the Securities Acts.-  Reves
v. Ernst & Young, 494 U. S. 56, 63 (1990).  These
considerations convince us that Alloyd's suggested
interpretation is not the correct one.
  There is a better reading.  From the terms -prospec-
tus, notice, circular, advertisement, or letter,- it is
apparent that the list refers to documents of wide
dissemination.  In a similar manner, the list includes
communications -by radio or television,- but not face-to-
face or telephonic conversations.  Inclusion of the term
-communication- in that list suggests that it too refers
to a public communication.
  When the 1933 Act was drawn and adopted, the term
-prospectus- was well understood to refer to a document
soliciting the public to acquire securities from the issuer.
See Black's Law Dictionary 959 (2d ed. 1910) (defining
-prospectus- as a -document published by a company
. . . or by persons acting as its agents or assignees,
setting forth the nature and objects of an issue of shares
. . . and inviting the public to subscribe to the issue-).
In this respect, the word prospectus is a term of art,
which accounts for Congressional confidence in employ-
ing what might otherwise be regarded as a partial
circularity in the formal, statutory definition.  See 15
U. S. C. 77b(10) (-The term `prospectus' means any
prospectus . . . .-).  The use of the term prospectus to
refer to public solicitations explains as well Congress'
decision in 12(2) to grant buyers a right to rescind
without proof of reliance.  See H. R. Rep. No. 85, 73d
Cong., 1st Sess., 10 (1933) (-The statements for which
[liable persons] are responsible, although they may never
actually have been seen by the prospective purchaser,
because of their wide dissemination, determine the
market price of the security . . . .-).
  The list of terms in 2(10) prevents a seller of stock
from avoiding liability by calling a soliciting document
something other than a prospectus, but it does not
compel the conclusion that Alloyd urges us to reach and
that the dissenting opinions adopt.  Instead, the term
-written communication- must be read in context to refer
to writings that, from a functional standpoint, are
similar to the terms -notice, circular, [and] advertise-
ment.-  The term includes communications held out to
the public at large but that might have been thought to
be outside the other words in the definitional section.

                            C
  Our holding that the term -prospectus- relates to
public offerings by issuers and their controlling share-
holders draws support from our earlier decision inter-
preting the one provision of the Act that extends
coverage beyond the regulation of public offerings, 17(a)
of the 1933 Act.  See United States v. Naftalin, 441
U. S. 768 (1979).  In Naftalin, though noting that -the
1933 Act was primarily concerned with the regulation of
new offerings,- the Court held that 17(a) was -intended
to cover any fraudulent scheme in an offer or sale of
securities, whether in the course of an initial distribu-
tion or in the course of ordinary market trading.-  The
Court justified this holding-which it termed -a major
departure from th[e] limitation [of the 1933 Act to new
offerings]--by reference to both the statutory language
and the unambiguous legislative history.  Id., at 777-
778.  The same considerations counsel in favor of our
interpretation of 12(2).
  The Court noted in Naftalin that 17(a) contained no
language suggesting a limitation on the scope of liability
under 17(a).  See id., at 778 (-the statutory language
. . . makes no distinctions between the two kinds of
transactions-).  Most important for present purposes,
17(a) does not contain the word -prospectus.-  In
contrast, as we have noted, 12(2) contains language,
i.e., -by means of a prospectus or oral communication,-
that limits 12(2) to public offerings.  Just as the
absence of limiting language in 17(a) resulted in broad
coverage, the presence of limiting language in 12(2)
requires a narrow construction.
  Of equal importance, the legislative history relied upon
in Naftalin showed that Congress decided upon a
deliberate departure from the general scheme of the Act
in this one instance, and -made abundantly clear- its
intent that 17(a) have broad coverage.  See Naftalin,
441  U. S., at 778 (quoting legislative history stating
that -`fraud or deception in the sale of securities may be
prosecuted regardless of whether . . . or not it is of the
class of securities exempted under sections 11 or 12.'-
S. Rep. No. 47, 73d Cong., 1st Sess., 4 (1933)).  No
comparable legislative history even hints that 12(2) was
intended to be a free-standing provision effecting
expansion of the coverage of the entire statute.  The
intent of Congress and the design of the statute require
that 12(2) liability be limited to public offerings.

                            D
  It is understandable that Congress would provide
buyers with a right to rescind, without proof of fraud or
reliance, as to misstatements contained in a document
prepared with care, following well established procedures
relating to investigations with due diligence and in the
context of a public offering by an issuer or its control-
ling shareholders.  It is not plausible to infer that
Congress created this extensive liability for every casual
communication between buyer and seller in the second-
ary market.  It is often difficult, if not altogether
impractical, for those engaged in casual communications
not to omit some fact that would, if included, qualify the
accuracy of a statement.  Under Alloyd's view any casual
communication between buyer and seller in the after-
market could give rise to an action for rescission, with
no evidence of fraud on the part of the seller or reliance
on the part of the buyer.  In many instances buyers in
pratical effect would have an option to rescind, impair-
ing the stability of past transactions where neither fraud
nor detrimental reliance on misstatements or omissions
occured.  We find no basis for interpreting the statute
to reach so far.

                           III
  The SEC, as amicus, and Justice Ginsburg in
dissent, rely on what they call the legislative background
of the Act to support Alloyd's construction.  With a few
minor exceptions, however, their reliance is upon
statements by commentators and judges written after
the Act was passed, not while it was under consider-
ation.  See Brief for Securities and Exchange Commis-
sion as Amicus Curiae 19-23; post, at ___ (Ginsburg, J.,
dissenting).  Material not available to the lawmakers is
not considered, in the normal course, to be legislative
history.  After-the-fact statements by proponents of a
broad interpretation are not a reliable indicator of what
Congress intended when it passed the law, assuming
extratextual sources are to any extent reliable for this
purpose.
  The SEC does quote one contemporaneous memoran-
dum prepared by Dean Landis.  See id., at 13 (citing
James M. Landis, Reply to Investment Bankers Associa-
tion Objections of May 5, 1933, p. 5).  The statement is
quite consistent with our construction.  Landis observed
that, in contrast to the liabilities imposed by the Act
-`that flow from the fact of non-registration or registra-
tion,'- dealings may violate 12(2) -`even though they
are not related to the fact of registration.'-  See ibid.
(emphasis added).  This, of course, is true.  The liability
imposed by 12(2) has nothing to do with the fact of
registration, that is with the failure to file a registration
statement that complies with 7 and 11 of the Act.
Instead, the liability imposed by 12(2) turns on mis-
statements contained in the prospectus.  And, one might
point out, securities exempted by 3 of the Act do not
require registration, although they are covered by 12.
Landis' observation has nothing to do with the question
presented here: whether a prospectus is a document
soliciting the public to purchase securities from the
issuer.
  The SEC also relies on a number of writings, the most
prominent a release by the FTC, stating that 12(2)
applied to securities outstanding on the effective date of
the 1933 Act.  See id., at 19-20.  Again, this is an issue
not in dispute.  Although the Act as passed exempted
securities from registration if sold by the issuer within
sixty days of the passage of the Act, see 1933 Securities
Act, 3(a)(1), the limitation did not apply to 12(2).  See
15 U. S. C. 77l.  Instead, actions brought under 12(2)
are subject to the limitation of actions provision in 13.
See 15 U. S. C. 77m (one year from the date of
discovery).  A buyer who discovered a material omission
in a prospectus after the passage of the Act could sue
for rescission under 12(2) even though the prospectus
had been issued before enactment of the statute.  This
tells us nothing one way or the other, however, about
whether the term -prospectus- is limited to a document
soliciting the public to purchase securities from the
issuer.
  In large measure the writings on which both the SEC
and Justice Ginsburg rely address a question on which
there is no disagreement, that is, -to what securities
does 12(2) apply?-  We agree with the SEC that 12(2)
applies to every class of security (except one issued or
backed by a governmental entity), whether exempted
from registration or not, and whether outstanding at the
time of the passage of the Act or not.  The question
before us is the coverage of 12(2), and the writings
offered by the SEC are of little value on this point.
  If legislative history is to be considered, it is prefera-
ble to consult the documents prepared by Congress when
deliberating.  The legislative history of the Act concern-
ing the precise question presented supports our interpre-
tation with much clarity and force.  Congress contem-
plated that 12(2) would apply only to public offerings
by an issuer (or a controlling shareholder).  The House
Report stated: -[t]he bill affects only new offerings of
securities . . . .  It does not affect the ordinary redistri-
bution of securities unless such redistribution takes on
the characteristics of a new offering.-  H. R. Rep. No.
85, 73d Cong., 1st Sess., 5 (1933).  The observation
extended to 12(2) as well.  Part II, 6 of the House
Report is entitled -Civil Liabilities.-  See id., at 9.  It
begins: -Sections 11 and 12 create and define the civil
liabilities imposed by the act . . . .  Fundamentally,
these sections entitle the buyer of securities sold upon
a registration statement . . . to sue for recovery of his
purchase price.-  Ibid.  It will be recalled that as to
private transactions, such as the Alloyd purchase, there
will never have been a registration statement.  If 12(2)
liability were imposed here, it would cover transactions
not within the contemplated reach of the statute.
  Even more important is the Report's discussion, and
justification, of the liabilities arising from omissions and
misstatements in -the prospectus:-
      -The Committee emphasizes that these liabilities
attach only when there has been an untrue state-
ment of material fact or an omission to state a
material fact in the registration statement or the
prospectus-the basic information by which the
public is solicited.  All who sell securities with such
a flaw, who cannot prove that they did not know-or
in the exercise of due care could not have known-of
such misstatement or omission, are liable under
sections 11 and 12.  For those whose moral respon-
sibility to the public is particularly heavy, there is
a correspondingly heavier legal liability-the persons
signing the registration statement, the underwriters,
the directors of the issuer, the accountants, engi-
neers, appraisers, and other professionals preparing
and giving authority to the prospectus--all these are
liable to the buyer if they cannot prove [the use of
due care].  This throws upon originators of securities
a duty of competence as well as innocence . . . .-
Ibid.
The House Report thus states with clarity and with
specific reference to 12 that 12 liability is imposed
only as to a document soliciting the public.
  In light of the care that Congress took to justify the
imposition of liability without proof of either fraud or
reliance on -those whose moral responsibility to the
public is particularly heavy--the -originators of securi-
ties--we can not conclude that Congress would have
extended that liability to every private or secondary sale
without a whisper of explanation.  The conspicuous
absence in the legislative history is not the absence of
an explicit statement that 12(2) applied only to public
offerings, see post at ___ (Ginsburg, J., dissenting), but
the lack of any explicit reference to the creation of
liability for private transactions.
  Justice Ginsburg argues that the omission from the
1933 Act of the phrase -offering to the public- that
appeared in the definition of -prospectus- in the British
Companies Act of 1929 suggests that the drafters of the
American bill intended to expand its coverage.  See post,
at ___ (Ginsburg, J., dissenting).  We consider it more
likely that the omission reflected instead the judgment
that the words -offering to the public- were redundant
in light of the understood meaning of -prospectus.-  Far
from suggesting an intent to depart in a dramatic way
from the balance struck in the British Companies Act,
the legislative history suggests an intent to maintain it.
In the context of justifying the -civil liabilities- provi-
sions that hold -all those responsible for statements
upon the face of which the public is solicited . . . to
standards like those imposed by law upon a fiduciary,-
the House Report stated: -The demands of this bill call
for the assumption of no impossible burden, nor do they
involve any leap into the dark.  Similar requirements
have for years attended the business of issuing securities
in other industrialized nations.-  H. R. Rep. No. 85, at
5.  So, too, the Report provided: -The committee is
fortified in these sections [that is, 11 and 12] by
similar safeguards in the English Companies Act of
1929.  What is deemed necessary for sound financing in
conservative England ought not to be unnecessary for
the more feverish pace which American finance has
developed.-  Id., at 9.  These passages confirm that the
civil liability provisions of the 1933 Act, 11 and 12,
impose obligations on those engaged in -the business of
issuing securities,- in conformance, not in contradiction
to, the British example.
  Nothing in the legislative history, moreover, suggests
Congress intended to create two types of prospectuses,
a formal prospectus required to comply with both 10
and 12, and a second, less formal prospectus, to which
only 12 would be applicable.  The Act proceeds by
definitions more stable and precise.  The legislative
history confirms what the text of the Act dictates: 10's
requirements govern all prospectuses defined by 2(10)
(although, as we pointed out earlier, certain classes of
securities are exempted from 10 by operation of 3).  In
discussing 10, the House Report stated:
      -Section 10 of the bill requires that any
`prospectus' used in connection with the sale of any
securities, if it is more than a mere announcement
of the name and price of the issue offered and an
offer of full details upon request [the exception
codified at 2(10)(b)], must include a substantial
portion of the information required in the `registra-
tion statement.' . . .
      -`Prospectus' is defined in section 2(1) [now 2(10)]
to include `any prospectus, notice, circular, advertise-
ment, letter, or other communication offering any
security for sale.'
      -The purpose of these sections is to secure for
potential buyers the means of understanding the
intricacies of the transaction into which they are
invited.-  Id., at 8.

Nothing in the Report suggests that Congress thought
that 10 would apply only to formal prospectuses
required to be produced by 5.  See 15 U. S. C. 77e.
Cf. post, at ___ (Thomas, J., dissenting).  The Report
undermines the dissents' self-contradicting conclusion
that the contract here is a prospectus under 2(10) even
though not subject to the requirements of 10.

                       *    *    *
  In sum, the word -prospectus- is a term of art refer-
ring to a document that describes a public offering of
securities by an issuer or controlling shareholder.  The
contract of sale, and its recitations, were not held out to
the public and were not a prospectus as the term is
used in the 1933 Act.
  The judgment of the Court of Appeals is reversed, and
the case is remanded for further proceedings consistent
with this opinion.

                                      It is so ordered.