explaining that the Court’s prior cases all “included some element of deception,” and did not “support the proposition ... that a breach of fiduciary duty by majority stockholders, without any deception, misrepresentation, or nondisclosure, violates the statute and the Rule”
How later courts described this case
- explaining that the Court’s prior cases all “included some element of deception,” and did not “support the proposition ... that a breach of fiduciary duty by majority stockholders, without any deception, misrepresentation, or nondisclosure, violates the statute and the Rule”
- stating that “the complaint [at issue] failed to allege a material misrepresentation or material failure to disclose,” and holding that “Congress [did not] mean[] to prohibit any conduct not involving [such] manipulation or deception”
- stating that market manipulation under Section 10(b) “refers generally to practices, such as wash sales, matched order, or rigged prices, that are intended to mislead investors by artificially affecting market activity”
- holding that federal securities laws cannot be used to contend that a corporate transaction did not fetch the best price; the federal regulation at issue is instead limited to disclosures
Written by the judges who cited it.
Distinguished
Distinguished by Roche v. EF Hutton & Co., Inc., 603 F. Supp. 1411 (1984)
430 U.S. 462, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977), and therefore are inapposite.
The opinion
Mr. Justice Stevens,
concurring in part.
For the reasons stated by Mr. Justice Blackmun in his dissenting opinion in Blue Chip Stamps v. Manor Drug Stores, *481 421 U. S. 723, 761 , 1 and those stated in my dissent in Piper v. Chris-Craft Industries, ante, p. 53, I believe both of those cases were incorrectly decided. I foresee some danger that Part IV of the Court's opinion in this case may incorrectly be read as extending the holdings of those cases. Moreover, the entire discussion in Part IV is unnecessary to the decision of this case. Accordingly, I join only Parts I, II, and III of the Court’s opinion. I would also add further emphasis to the fact that the controlling stockholders in this case did not breach any duty owed to the minority shareholders because (a) there was complete disclosure of the relevant facts, and (b) the minority are entitled to receive the fair value of their shares. 2 The facts alleged in the complaint do not constitute “fraud” within the meaning of Rule 10b-5.
See also Eason v. General Motors Acceptance Corp., 490 F. 2d 654 (CA7 1973), cert. denied, 416 U. S. 960 .
The motivation for the merger is a matter of indifference to the minority stockholders because they retain no interest in the corporation after the merger is consummated.