Securities and Exchange Commission v. Chinese Consolidated
Benevolent Association, Inc. case brief summary
120 F.2d 738 (1941)
CASE FACTS
Plaintiff Securities and Exchange Commission sued defendant association to enjoin it from violating the Securities Act of 1933, 15 U.S.C.S. § 77a et seq., prohibiting the sale of unregistered securities, for defendant's solicitation of offers to purchase unregistered Chinese government bonds. The trial court granted defendant's and denied plaintiff's motions for judgment on the pleadings, and entered judgment dismissing plaintiff's complaint because the Chinese government did not authorize defendant to act for it.
DISCUSSION
The court reversed the judgment on the pleadings for defendant association in plaintiff Security and Exchange Commission's suit and remanded with directions to deny defendant's motion to dismiss and to enjoin defendant from selling unregistered Chinese government bonds because defendant solicited offers to buy securities and was an "underwriter" not exempt from 1933 Act.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
120 F.2d 738 (1941)
CASE SYNOPSIS
Plaintiff Securities and Exchange
Commission appealed an order granting defendant benevolent
association's motion for judgment on the pleadings and dismissing
plaintiff's complaint alleging violation of Securities Act of
1933, 15 U.S.C.S. § 77a et seq., through defendant's sale of
unregistered Chinese government bonds, and denying plaintiff's motion
for judgment on the pleadings.CASE FACTS
Plaintiff Securities and Exchange Commission sued defendant association to enjoin it from violating the Securities Act of 1933, 15 U.S.C.S. § 77a et seq., prohibiting the sale of unregistered securities, for defendant's solicitation of offers to purchase unregistered Chinese government bonds. The trial court granted defendant's and denied plaintiff's motions for judgment on the pleadings, and entered judgment dismissing plaintiff's complaint because the Chinese government did not authorize defendant to act for it.
DISCUSSION
- On appeal, the court reversed, holding that under §77e, a sale included the "solicitation of an offer to buy" a security "for value," regardless of whether the solicitor was authorized by the issuer.
- Further, it held that defendant was not a person other than an issuer, underwriter or dealer exempt from §77e since it was an "underwriter," defined as one who sold for an issuer in connection with the distribution of a security.
The court reversed the judgment on the pleadings for defendant association in plaintiff Security and Exchange Commission's suit and remanded with directions to deny defendant's motion to dismiss and to enjoin defendant from selling unregistered Chinese government bonds because defendant solicited offers to buy securities and was an "underwriter" not exempt from 1933 Act.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
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