826 F.2d 1470 (1987)
Appellee decided to eliminate its public ownership and purchased its publicly traded stock from the stockholders. Appellants sued appellee for violations of 17 C.F.R. § 240.10b-5, § 240.13e-3, and § 240.14a-9. The district court granted appellee's motion for summary judgment and dismissed the complaint.
- The court reversed the judgment and held that appellants had a private right of action under § 240.13e because the statute was intended to protect investors; the legislative history supported an intent to allow a private remedy; a private action was consistent with the legislative scheme; and the cause of action was not traditionally relegated to the states.
- The court held that appellee's conclusory statements in the proxy statement did not satisfy the disclosure requirements of Item 8 of Schedule 13e-3.
- This act was only a violation of § 240.13e-3 because the conclusory statements did not constitute fraud under 17 C.F.R. § 240.10b-5 or § 240.14a-9.
The court reversed the district court judgment. The court remanded with instructions to reconsider defendants' failure to provide Item 8 information in violation of a certain rule and to consider issues of materiality of defendants' omission under that rule. After reconsideration, among other things, the district court should determine whether it was necessary to decide the alternative state claims respecting breach of fiduciary duty.
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