finding no implied private cause of action in a statute that made it “unlawful” for a broad range of persons to make untrue or deceptive statements in connection with tender offers and solicitations of shareholders with respect to tender offers
How later courts described this case
- finding no implied private cause of action in a statute that made it “unlawful” for a broad range of persons to make untrue or deceptive statements in connection with tender offers and solicitations of shareholders with respect to tender offers
- observing that the SEC’s “institutional limitations alone do not lead to the conclusion that any party interested in a tender offer should have a cause of action for damages against a competing bidder” in refusing to imply a private right of action under § 14(e) of the Exchange Act
- implying that shareholder-offerees, the class Congress clearly intended to protect in enacting Section 14(e
- holding that tender offerors do not have standing under Section 14(e) to bring an action for damages; declining to reach issue of whether an issuer or shareholder has such standing
Written by the judges who cited it.
Later courts went against this
Questioned by Altman v. Knight, 431 F. Supp. 309 (1977)
- U.S. -, ---, 97 S.Ct. 926, 51 L.Ed.2d 124 (1977), casts doubt on whether a target corporation has standing to bring a private action for damages pursuant to this section.
The opinion
Judge Gurfein’s
Concurring Opinion
Judge Gurfein concurred “generally” in Judge Timbers’ opinion for the court. On the issue of standing, Judge Gurfein agreed with the District Court’s approach in considering the matter as one of “causation before considering the question of standing.” 480 F. 2d, at 393. Under Judge Gurfein’s approach, Chris-Craft had standing because Bangor’s acquisitions of Piper shares were necessary for control. As to scienter, Judge Gurfein was of the view that “mere negligence” would not suffice but that “ 'recklessness that is equivalent to wilful fraud’ is required . . . .” Ibid. (Citation omitted.)
Judge Gurfein disagreed, however, with Judge Timbers’ analysis of the alleged Rule 10b-6 violations. He refused to indulge the presumption of “stimulating effect” embraced by Judge Timbers and concluded rather that because “the [illegal] block purchases were necessary for control causation was established. . . .” 480 F. 2d, at 393.
With respect to the SEC action against Bangor Punta, Judge Gurfein, writing for himself and Judge Mansfield, upheld the District Court’s refusal to grant a permanent injunction. Applying the “abuse of discretion” standard, Judge Gurfein concluded that “the matter is not so clear that we should substitute our judgment for the judgment of the experienced trial Judge below who sat as a chancellor in equity.” Ibid.