On January 26, 2010, the U.S. District Court for the Southern District of New York dismissed without prejudice a lawsuit brought by 19 hedge funds against PXRE Group, Ltd. (PXRE), a reinsurance corporation, Argo Group International Holdings, Ltd., its successor in interest, and Jeffrey L. Radke, Guy D. Hengesbaugh and John M. Modin, three PXRE officers (collectively, Defendants), alleging violations of Section 12(a)(2) of the Securities Act of 1933 (Securities Act). The court also declined to exercise supplemental jurisdiction over the hedge funds’ state law claims for fraud and negligent misrepresentation. In examining the details of this action, this article addresses: (1) the mechanics of the Rule 144 sale, (2) the standard by which courts evaluate misrepresentations in a prospectus for a private offering of securities; and (3) how the applicable standard in securities fraud actions differs for Qualified Institutional Buyers (i.e., those entities which own and invest on a discretionary basis at least $100 million in securities) from others.