How does her case differ from the insiders at Texas Gulf Sulphur or from other outsiders who have been convicted of insider trading? 7741 (Nov. 4, 1965) relating to suspension in trading of Belock Instrument Corporation, a defendant in Heit v. Weitzen, supra. [12] We do not suggest that material facts must be disclosed immediately; the timing of disclosure is a matter for the business judgment of the corporate officers entrusted with the management of the corporation within the affirmative disclosure requirements promulgated by the exchanges and by the SEC. 78m, to be kept "reasonably current" by periodic and other reports filed with the Commission and the stock exchanges. at 293, the intent of the Securities Exchange Act of 1934 is the protection of investors against fraud. Insider Trading - Library of Economics and Liberty Mollison and Holyk were in New York for the weekend, and there was no telephone at the site the only way to communicate with the site was to go there. Similarly 17(a) of the 1933 Act, 15 U.S.C. The trial court stated only that "While, in retrospect, the press release may appear gloomy or incomplete, this does not make it misleading or deceptive on the basis of the facts then known." Held: cause of action stated under 10b-5). With the exception of Stephens and Fogarty as recipients of stock options, I agree with the majority on the disposition of the cases involving individuals. 78b, see Kohler v. Kohler Co., 319 F.2d 634, 642 (7 Cir. 12: Insider Trading: Foundations and Merger News. Here, notwithstanding the trial court's conclusion that the results of the first drill core, K-55-1, were "too `remote' * * * to have had any significant impact on the market, i. e., to be deemed material,"[11] 258 F.Supp. at 296. . Gediman v. Anheuser Busch, Inc., 299 F.2d 537, 545 (2 Cir. Following a visit to the discovery property, The Northern Miner can say that a major new zinc-copper-silver mine is definitely in the making, one that has all the earmarks of shaping into a substantial open pit operation. 1966); United States v. Schaefer, 299 F.2d 625, 629 (7 Cir. 78u(e), against Texas Gulf Sulphur Company (TGS) and several of its officers, directors and employees, to enjoin certain conduct by TGS and the individual defendants said to violate Section 10(b) of the Act, 15 U.S.C. 1964), to include non-reckless negligent misrepresentations or omissions, see Note, 63 Mich.L.Rev. It was the intent of Congress that all members of the investing public should be subject to identical market risks, which market risks include, of course the risk that one's evaluative capacity or one's capital available to put at risk may exceed another's capacity or capital. A myriad of reasons would be given hope that a commercially profitable mine would be found if further exploration proved the ore to be as promising as the core of K-55-1 (November 12, 1963); the development of a phosphate project and potash mine (November 15, 1963); the prediction of security analysts that there would be a turnabout in the price of sulphur stocks; the acquisition of Canadian oil properties (December 16, 1963); the new high level of free world sulphur use and output (December 30, 1963); the launching of the world's largest liquid sulphur tanker (December 30, 1963); the entry into service of a large liquid sulphur tanker for domestic shipments (January 18, 1964); the sulphur expansion program in Canada (February 8, 1964); the new four-year high in sales reached in 1963 (February 20, 1964); and the $2 per ton price increase for sulphur (April 1, 1964). Holyk left for New York Saturday morning and arrived that same day. From Mollison Fogarty had been told of the developments through 7:00 P. M. on April 10, and of [846] the remarkable discoveries made up to that time, detailed supra, which discoveries, according to the calculations of the experts who testified for the SEC at the hearing, demonstrated that TGS had already discovered 6.2 to 8.3 million tons of proven ore having gross assay values from $26 to $29 per ton. 824, 832 n. 36 (1965), citing McClure v. Borne Chemical Co., 292 F.2d 824, 834 (3 Cir. Of course, if any of the five knowledgeable defendants had rejected his option there might well have been speculation as to the reason for the rejection. 972, 978 (SDNY 1964); Miller v. Bargain City, U. S. A., Inc., 229 F.Supp. Texas Gulf Sulphur was a mother lode of legal issues. 1383, 73d Cong., 2d Sess. I suppose it would be clear, under Ruckle v. Roto American Corp., 339 F.2d 24 (2 [865] Cir. 78j (b) and Rule 10b-5; we reverse the judgment order entered below dismissing the complaint against appellees Charles F. Fogarty, Richard H. Clayton, Richard D. Mollison, Walter Holyk, Kenneth H. Darke, Earl L. Huntington, and Francis G. Coates, as we find that they have violated 15 U.S.C. There is no indication that Congress intended that the corporations or persons responsible for the issuance of a misleading statement would not violate the section unless they engaged in related securities transactions or otherwise acted with wrongful motives; indeed, the obvious purposes of the Act to protect the investing public and to secure fair dealing in the securities markets would be seriously undermined by applying such a gloss onto the legislative language. Chiarella v. The approach has led, in many cases, to doctrinal uncertainty, a result that is reflected in the recent . As we stated in List v. Fashion Park, Inc., 340 F.2d 457, 462, "The basic test of materiality * * * is whether a reasonable man would attach importance * * * in determining his choice of action in the transaction in question. LAW OF CORPORATE MANAGEMENT AND FINANCE LGST Legal Studies & Business 1968). The market opened at 30 1/8 on the 13th (when the release became public) and closed at 30 7/8 scarcely a sign of public pessimism. The final question to be answered is: were these officers and employees disqualified as the result of possessing information gleaned by the first drill core from purchasing TGS stock? denied, 394 U.S. 976 (1969). But such a press release would have been highly misleading since the information necessary to draw such conclusions was not available on April 10 according to the TGS witnesses whom the District Court chose to believe.

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