. Securities and Exchange Commission v. Texas Gulf Sulphur Co The Commission's arsenal of weapons for fighting misleading statements has certainly not been shown to be insufficient for it to carry out the tasks that Congress assigned to it. Question: Develop the argument that Martha Stewart was not really in possession of inside information that was disclosed in a breach of a fiduciary duty. A further insight into the proper scope of 10b-5 can be gained by examining 17 (a), 15 U.S.C. Visual estimates by Holyk of the core of K-55-1 indicated an average copper content of 1.15% and an average zinc content of 8.64% over a length of 599 feet. H.Rep.No.85, 73dCong., 1st Sess. However, the District Court found that: The April 12 release therefore correctly described Kidd 55 as a "prospect." According to Corcoran these five ideas were (1) control on the amount of credit, (2) control of manipulations, (3) control of insider trading [ 16(b)], (4) elimination of abuses in the market machinery, and (5) the establishment of the Securities Exchange Commission to administer the Act. The majority argue that when compared with the above provisions the slight change of wording in 10(b) the insertion of the phrase "in connection with [885] * * *" indicates that Congress intended a revolutionary change in the whole thrust of the securities laws. ), cert. Who Is Harmed by Insider Trading? - Econlib 757, 772 (D.Colo.1964), has been expanded from recklessness, see Prosser, Torts, 102, pp. Incorrect Mark 0 out of 1. 3230 (May 21, 1942); 10 SEC Ann.Rep. This visual estimate convinced TGS that it was desirable to acquire the remainder of the Kidd 55 segment, and in order to facilitate this acquisition TGS President Stephens instructed the exploration group to keep the results of K-55-1 confidential and undisclosed even as to other officers, directors, and employees of TGS. The case began in 1959 when the Texas Gulf Sulphur Company purchased some property in Timmins, Ontario, to check for ore deposits. at 282 (emphasis added). That's somewhat ironic, because the whole concept of disgorgement was initially contrived through the SEC's early insider trading successes, beginning with SEC v. Texas Gulf Sulphur in 1968 . The importance of this opportunity to observe where technical or scientific problems are before the court, as here, has been succinctly stated by the Supreme Court in Graver Tank & Mfg. We hold only that, in an action for injunctive relief, the district court has the discretionary power under Rule 10b-5 and Section 10(b) to issue an injunction, if the misleading statement resulted from a lack of due diligence on the part of TGS. We are satisfied that these purchases in February and March, coupled with his readily inferable and probably reliable, understanding of the highly favorable nature of preliminary operations on the Kidd segment, demonstrate that Huntington possessed material inside information such as to make his purchase violative of the Rule and the Act. The Commission has carefully defined the scope of sampling required to justify even estimates, as follows: Id., Item 8(A) (c), 1 CCH Fed.Sec.L. See Bromberg, op. The requirement that a statement may not be found misleading unless its issuance is actuated by a "wrongful purpose" might well have the effect of permitting the issuers of misleading statements to seek an advantage but to escape liability if the advantage fails to materialize to the degree contemplated, or cannot be demonstrated. 258 F.Supp. The statement was released Sunday afternoon and Mollison and Holyk were asked "to return to Timmins as promptly as possible and to move things along." Forthcoming: 42 Quinnipiac Law Review (2023) (Symposium Issue), SMU Dedman School of Law Legal Studies Research . This is the old version of the H2O platform and is now read-only. The event that changed it all was the SEC's 1966 suit against Texas Gulf Sulphur Company and thirteen of its employees and directors. (Great American brief, pp. This result seems to have been predicated upon a misinterpretation of dicta in Cady, Roberts, where the SEC instructed insiders to "keep out of the market until the established procedures for public release of the information are carried out instead of hastening to execute transactions in advance of, and in frustration of, the objectives of the release," 40 SEC at 915 (emphasis supplied). 91,317 (N.D.Ill. The court [US Court of Appeals for the Second Circuit] contended that the federal insider trading prohibition was intended to assure that 'all investors trading on impersonal exchanges have relatively equal access to material information.' This is not to suggest, however, as did the trial court, that "the test of materiality must necessarily be a conservative one, particularly since many actions under Section 10(b) are brought on the basis of hindsight," 258 F.Supp. Before LUMBARD, Chief Judge, and WATERMAN, MOORE, FRIENDLY, SMITH, KAUFMAN, HAYS, ANDERSON and FEINBERG, Circuit Judges. ); Meisel v. North Jersey Trust Co., 218 F.Supp. No one has asserted, or reasonably could assert, that the purpose for issuing a release was anything but good.
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