www.aktienbase.de/board65-aktienmärkte/...on-mutual/#post39944
freundlicherweise von User Frankmaui dort eingestellt:
ZItat WithCatz:
Folse, in his arguments at oral closing arguments, said there was a case that the EC had found since their written opinion.
He went on to say that since it was new he was reading the "citation" into the oral record.
I think this is the case:
SIMON DeBARTOLO GROUP, L.P.,
v.
RICHARD E. JACOBS GROUP, INC.,
scholar.google.com/scholar_case?c…999&as_yhi=1999
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Re: The newly-found case that Folse mentioned on 8/24
Just back from a little vacation and I see this. My response: "Catz, are you trying to make me totally crazy?" Whenever one of these obscure cases is cited I feel an obligation to try to explain it, to the best of my ability. But this one takes the cake. My advice: Don't anybody (especially a layman) try to read and understand this or you may go stark, raving mad, and will seriously waste your time. Seriously.
Having said that, as a long-time 49ers fan (sort of, like I really care about professional football, but I've lived in the Bay Area for 45 years), I was intrigued because the case involves the über rich DeBartoldo family, who first owned the team during the Bill Walsh/Joe Montana era. So, as a public service (and as partial penance for having ever been a lawyer, at all - Mea culpa, culpa mea), I offer the following:
Very, very long story very short: The DeBartolo family owned a big share in a real estate limited partnership that specialized in shopping centers. Defendants were other investors who had a plan ("Project Grand Slam", sound familiar?) to turn the partnership into a REIT that would "go public" so they would all get richer. Their group signed a non-disclosure agreement in order to get access to private business information of the partnership in order to evaluate the plan. (Again, sound familiar?) After getting that info, they saw it was a good investment and proceeded to acquire additional positions by making a attractive offers and picking off other investors' shares, when those investors didn't know what the defendants knew. (Just like the SNHs.) DeBartolo countered by upping its own tender offer substantially and also by filing suit for an injunction against the defendants alleging securities law violations relating to trading on material, non-disclosed, non-public information. This suit required the defendants to spend a lot of money on attorneys. As it turns out, DeBartoldo won the battle by means of the tender offer, but the losers (the defendants) tried to recoup some of their losses by requesting the trial judge to impose sanctions on DeBartoldo for filing a "frivolous" complaint regarding SEC violations which was filed for "improper purposes". The trial court agreed, holding there was no private right of action for violations of such SEC laws, and imposed sanctions of $100,000. The Court of Appeal reversed in part, holding that the lawsuit was not "frivolous".
The "bottom line" holdings of the appellate court, and the reason I think it was cited by Parker Folse, was its finding that (1) DeBartoldo had "standing" to complain of the defendants' acts, just as we are complaining that we have standing to complain of the SNHs' acts. And also (2) that the defendants had a duty to third parties (the world) to disclose material undisclosed facts or to abstain from trading.
The appellate court held:
(1) "The question of DeBartolo's standing to assert an insider trading claim arises because DeBartolo concededly had no transactions with the defendants. On the contrary, the basis for DeBartolo's claim is that the defendants failed to make necessary disclosures when trading with other RPT shareholders. The harm to DeBartolo flowed, if at all, from the collective impact of those transactions upon the chances of success of DeBartolo's tender offer.
"At first blush, that DeBartolo does not claim that it bought or sold securities as a result of the defendants' alleged fraud seems fatal to DeBartolo's standing. As the district court noted, see id., the general rule is that Rule 10b-5 protects only those who are defrauded in the course of purchasing or selling securities. See [citations].
"The Blue Chip Stamps-Birnbaum rule is not without exceptions, however. Most important for present purposes, we have recognized that the rule does not necessarily extend to actions seeking injunctive relief. In Crane Co. v. American Standard, Inc., 603 F.2d 244 (2d Cir.1979), although we concluded that a disappointed tender offeror could not assert a claim for damages under Rule 10b-5 because it was not itself a defrauded investor, we nonetheless found that the plaintiff had standing to assert a claim for injunctive relief.[6] See id. at 250-51 & n. 15, 254 & n. 23. The plaintiff in Crane had argued that it had been injured by its competitor's market manipulations, which, by raising the market value of the target's stock, tended to defeat the plaintiff's tender offer. See id. at 245-47. Similarly here, DeBartolo claimed that the defendants' fraudulent purchases of RPT stock tended to defeat its tender offer. In light of the fact that DeBartolo sought not damages but injunctive relief, therefore, Crane provides at least a good faith basis for DeBartolo's assertion of standing. [Citations].
. . .
"To be clear, we do not hold that DeBartolo had standing to seek an injunction; that issue is not before us. We hold only that, as an external competitor seeking only injunctive relief, DeBartolo arguably had standing under Crane. DeBartolo's assertion of standing in the district court therefore was not frivolous. Accordingly, the district court erred insofar as it relied on the fact that DeBartolo was neither a purchaser nor a seller with respect to the challenged transactions in concluding that appellants' 10b-5 claim was frivolous. . ."
And, (2) [emphasis added]:
"By placing particular emphasis on what it described as the lack of a "fiduciary relationship between the parties to the suit," id., the district court may have meant that appellants insufficiently alleged the requisite duty of the defendants to disclose the inside information it held or to abstain from trading in RPT shares. Appellants were not obliged to demonstrate a fiduciary relationship between DeBartolo and the defendants in order to establish this duty, however. Under the traditional theory of insider trading, appellants merely were required to demonstrate a fiduciary or similar relationship of trust and confidence between the defendants and RPT's shareholders generally. See O'Hagan, 521 U.S. at 652, 117 S.Ct. 2199; Dirks, 463 U.S. at 654-55, 103 S.Ct. 3255; Chiarella, 445 U.S. at 227-230, 100 S.Ct. 1108; Chestman, 947 F.2d at 565. Such a relationship may arise, as noted previously, where an outside party is given access to material non-public information by an issuer "solely for corporate purposes in the context of `a special confidential relationship.'" Chestman, 947 F.2d at 565; see also Dirks, 463 U.S. at 655 n. 14, 103 S.Ct. 3255. Appellants, by alleging that RPT provided the defendants and the other Grand Slam parties with material non-public information to be used confidentially and solely for purposes of formulating Project Grand Slam, appear to have placed the defendants squarely within this limited category of corporate outsiders subject to the prohibition on insider trading, as outlined in Chestman and Dirks. Appellants therefore at least arguably alleged facts sufficient to establish the requisite duty to disclose or to abstain."
So that's my take on the points Parker was trying to make, for what it's worth: We have standing to complain and the SNHs have a duty to either disclose MNPI or abstain from trading altogether.
Thanks, Catz, I think.
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