Appendix — Securities & Exchange Commission v. National Securities, Inc.

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APPENDIX =o ihe = 63 gt

United States Court of Appeals fo ri sahiaon

osaretiegst 247)

ST tis 7

okt ihe oy No. 21,146 [November 4, 1967) ai

Ee Sscommme 40, Froranar Cems, ems .

uv. e824 . it S58 psihye zit

‘Nosieis Szourrries, ING.,:\A CORPORATION; ‘Nadiowar,

Lire & Casuauty InsvRANCE COMPANY, “A OORPORA-

TION; Ropert H. Watxace; Roserr C. ‘BowAnnan, :

“JR. ; ‘ARTHUR W. SAFFERT; ‘Tap Wirxins: Jonx'S. eee

BARRert: JosePH B: ‘SETTER; “Brtererd W. ‘LARGE,

IR. ; RrcHaRD G. JOHNSON; ‘ERNest A.” Rrowanne;

Wituam A? ‘REevy; Bonn B.. Brsaey j PRopucers

Lire INSURANCE Company, a “CORPORATHON ¢ ‘AND Pro-

pucers Tuer & Loan ‘Compan, a OORPORATION

APPELLEES , Be gis aor

On heen from the United ‘States District Court for :

site District of Arizona —

:; Before Jzarpera and MERRILL, Girowih audes, and

TatLor, District Judge... .:)

-. Jgprpere, Circuit Judge: ‘Before us is an. appeal

under 28° U.S.C. § 1291 -by: the plantiff below. and

| appellant in this courf, and Exchange Com- :

i mission, from a final judgment. of. the Aimy ee

District Court. for: the District of. Ariz

-@45

a

—- etige-- ~

Saction 2le of the Sooutities and . ecshainon Act ot. |

1984, 15 U.S.C. 78u(e}, to enjoin violations of the anti-

-” fraud provisions of that Act. Sec. 10(b), 15 U.S.C. .

_ 78j(b), and Rule 10) 5 of that Act, 17 CFR 240. 10b-5,

ma ater fie eee i aay the pe of two stock

~. Jife insurance companies on the ground that the proxy

'. . solicitation material mailed to the stockholders of the

two firms contained positive misrepresentation of ma-.

- te¥ial-'fadts, 4214'aldo failed to state” material facts

necessary to make the statements therein not mislead-

ing in. ight of. ‘the, circumstances under which Sher

were made. .

Appellee National Becurities, Ine. is a Colorado cor-

| poration doing business in Arizona as a holding eom-

- pany ‘owning a controlling interest.in the stock, of

National-Life & Casualty Insurarice Company, an Ari-;

-gona,conporation, Appellees; Wallace; Bohannan,

- Saffext, Wilkins,. Barrett, Setter and. Large.are officers

of the appellegs National Securities, National Life, or ~

‘another subsidiary of National Securities... - .

Appellee Producers Life Insurance Company i is an _

Arizona corporation which conducts ‘a life insurance -

“business in Arizona\and other western states.

As of April 27, 1964, Producers Life had approxi-

mately 14,000 stockholders ‘with 880,000 shares. of

common stock issued and outstanding, © ant S.: .

were owned diteetl} Weems peg Ot at

at eS er

: this litigation’ us in tolling theetote:t the ling

‘directors, together with..J. Grant ‘Everson, Jess Ei:

’ Hunter, and John J. Falgoné?; made-tip Prodweatt

Life’s ‘hoard of -ditectars. Hn addition,-the sling

‘directors ‘other than Baca hae es phenies for, be

. about 565,000 shares. >

-. The amended and supplemental. doinplaint: in 2

‘stance alleges that.since March 15,'1964, appellees

and the selling difeetors have made /uschof. means:and

instrumentalities in interstate cohimeree'andithe mails |

to advance a scheme by manipulative and deceptive _

devices’ in ‘connection withthe purchase and sale’ of

- stock in Producers Life and National Life to defraud

Producers Life and its stockholders by making ‘false

and misleading statements, and that since that date ©

appellees have effected various arrangements. with the

ultimate. purpose of merging Producers Life with . |

National Life in derogation” of the rights of Pro- ~

ducers Life’s ‘stockholders, and contrary to the

fiduciary responsibilities of the selling directors and

appelleés . Wallace, Saffert, dere Barrett, and

' Large.

The complaint: -sets forth in detail the various acts,

transactions and oceurrences which transpired, lead-

ing up to the consolidation agreement. of November

_- 27, 1964, between National Life and Produeers Life: -o

The agreement provided for the submission of the —

agreement to the stockholders of Producers Life and

N ational Life... |

. - Beginning in August, 1964, appellees: Neltional Se-

, Gustto National Life, Bohannan, Wallaee, Saffert,

Thay, along’ with’ Prodacets ‘Tit, & Loe Company, are

not how parties to the action, thi suit as to them having

‘been. dismiisyetl ..without preju Se NL HS, TE 1, 2 é

. nt’s motion, ‘to’ frtiertd its’ Amierided. ‘so ,

ificlnde them ‘having beet denibd gn’ Februnty es ws

Cf Sadie Medes arte

; om

; Wilkins, Barreth Setter and Large conducted a proxy

solicitation. campaign ‘by mailing communications to.

Produceté- Life's 14,000 ‘stockholders throughout the -

.. United States. It is the alleged’ ‘material misstate-

- ments andthe allegéd omission of. material facts in j

_. these proxy solicitation. Jcommonnhontiont be which

ss appellant complains, \

af The complaint then alleges, in detail, m numerous mis-

statociennts dn enriidelons of tnatesia} tacts.

‘A special stockholders’ meeting was. held: ‘on April

19, or 26, 1965,:atwhich the: shareholders ‘approved

and tonfirmed the merger. ,

- (Phe complaint further alleges that following the

stockholders meeting, the appellees sent false and mis-

oe statements to the shareholders of Producers

Life.’ ‘is further alleged that the consolidation agree-

ment is void as an essential element of a fraudulent

scheme and because it had never been validly approved

ee eee ae et ee

‘It appears that the merger agreement was submitted

to the Arizona Director of Insurance on May 7, 1965,

“end: approved’ by him on July 9, 1965. It further ap-

‘pears that since that time:the National Group has con-

' .. ducted the affairs of National Life and Producers Life

as a single operation. © . :

in the court below, appellant prayed tor the foilow- :

gl hi rd cen ya

1 at

Sas ae Some me

| just and equitable: J .

On September 1, 1965, appellees filed a motion me

for judgment on the pleadings. or, in the,alternative, -

for summary judgment, The district court’ granting .

the motion for summary’ ap RE on hag Pleadings,’

stated inter alia: rah

mh ‘Bren if it be amumed tat § 10 b). would -

otherwise be ap licable to ~prox ions

| eae omitted], and poll gp yolder-ap-

‘proved corporate te consolidation and reorgani-

zation is a. ‘purchase or sale’ .of securities —

within. the, speening: ¢ “al ae. b) and Rule 10b-5 .

[citations omitted], th ‘remains

tion of whether the McCarran Act [59, Stat.

15 U.S.C. §$§ 1011-1015] does not preclude

! ths application in this. case of: $10(@),. as im- _

; 8.8 U0, {AOR ala part:

ae * , in

oh Ne Act sof i ETOSS « g Dersomatened “to,

-

ae ini ARS. 320.7, which. reads as

tre. “iO toy ihe oegit petal. 14 .

) ~ "a ge NAL A: | ciel: podtert af kind

may mergeor, Consolidate with x of any ‘kind

ste te foreign, stock iaiieoer by complying with

the provisions of ‘gereral law g the.

ee or. consolidation of. -eorporations —

, formed for profity, but p wabject: to’ subsection B

08, section. » -

this.

8B. No-sach merger or consolidation shall

be effected. unless in advance thereof the plan

and agreement théréfor have been filed’ with -

and approved in writi the director of in-

surance. The director give his’approval

[within 6 Tonsopable tne after fling. nless he :

to the. stockholders of any

‘domestic inacteet involved. ,

- 3. Would substantially reduce the security

_of the service to be rendered to pelicyholders

Ma

vi where.’

N _ 10, Arizona, law farther provides for an >

3 tothe State courts from a decision of

oe r of Insurance ‘made under the a

is ¥ ; o) of A.R.S. § 20-731 [see ARS. §§ 20-

ae 1l. Made: the remedies which the Securi-

Commission may seek jn this

whi s3@) of. the 1934 Act, ©

ties and Ex

Sit, 3 7. may

Res ‘court

>i O° ftates :

up fey ar ther ie met tn

A _eretion, institute: ‘the. nécessa oP vs

Mon el at" Phe fe xo Ho, vast ses “sh ms

| of of th

ee ovisions cra pe meaning 5 Ne,

C.§1012(b)}; *

‘Appellant speeiben that the site acca

1. (IJ: granting defendants’ [appellece’] mo--

ry ition. for: ti pio the

‘ground tha Juda rede < iB drge the

8 istreaag! r the antifr ieee

= Sahenatalvtien

leg 10b-5 the’ Bo.

2. [I]n holding that it could ‘sok grant relief

[:. to “reality eorreet the of de-.-

foadante’” Tappan a |

2s

he Ti prep at d's 23 eli Jimsiie 8

e; : BSTC rPeImea yy, € 1

bg v Pek = £24 : ’

N68 T Ax ps 4.1: £

‘ia asa atthe asc

ak rue @ aT? may ve 8 that

, %,”

Ba

‘cowith the: seacitinadbien of Pictones Life and

, National Life into National Producers and the

“fraudulent omissions in the of Pro-

ducers ee, stock wére not ‘‘in con-

nection with the purchase or sale” of securities

oewithin: the’ m of Section 10(b) of: the

Seourities 'Mxchange Act and Bale 100-6 there-

Appellees | onitend on this appeal that the suit must |

be dismissed for want of indispensable parties, The

Andiapenaale patio re referred to are Johnson, Rich-

sree Hapa poems ane aivadealet Gol'"ePieinees.

It.is clear that the dintstot court did not reach the

question whether the consolidation of Producers Life

and National Life into National Producers involved .

. purchases or sales of securities in connection ’ with

which the alleged fraud oceurred.

‘In view of the conclusion which we have reached,

we shall discuss only one of the issues of law raised

by appellant. That issue is whether the allegations of

acy’ declares that the ssi staaed :

and taxation by the several | States of

tbe busines of insurance i in the ublic inter-

| i Se ay he

The Act further provides ahidacasts debibee oh shot

No Act of Corlgross shall be’ construed to K

te J tainted

to cee Pr

/ | ;

The Act them makes colin federal. stntutel (Sher- ;

‘man Act, Clayton Act, and Federal Trade Commission ,

Act) applicable to the business of insurance “to the

extent that. such business is not regulated by. State

law”, and other Federal statutes (National Labor Re-

lations Act, Fair Lebor Standards Act of 1938,. and

Merchant Marine Act, 1920), fully applicable.to the

business of insurance. 15 U/8.C. §§1012(b), 1014._

. The McOarran Act was paheda following the decision

_ in United States v. aie oa Underwriters As-

commerce clause. This decision upset the previously

long-held understanding that the business of insurance

was not commerce and was subject. only fo state regu-

lation. On this’ understanding was built a substantial ©

structure of regulation by the states. “[T]he states

took over exclusively the function of regulating the

insurance business in, its. specific legislative manifesta-

- tions. Congress legislated only in terms applicable to

.. commerce generally, without particularized reference

to insurance.” Prudential Insurance-Co, y. Benjamin,

brs U. 8. 408, 415 (1946). Va

aie after. the berg Underwriters

tet a Mee

etal anti: tru regan, But the roms result was.

is

Whee

. i ‘Sse ¥ eS

“ated v's Wien,

ppells ;

Corigress:

eat ave

iy}

Chale ges” fs

b. PFE es

Mat) cet eo

bi Ret rir

ABLE

pein

v

Pag Stash a What sve nds it ?

\ 2

f i t t

at pieas OS Pere

rey yi t 4

‘ “ Lee ei

*

4] 9 -

aes “beet hemaro din ‘Congreesions] | Beeringa bell) pre; to ‘the

tis

186048 Stak Pade ns seotees io omelet

Exchange Act in the debates’ ori the MéOutratt Act. We

ate left then ‘with «general intention’ |. Get the instire *

NE anes nnen ce mene ane

nomme This is“evident' foi sections

MeOérran Act, 15 U:8.0:'§§ 1018, 1014.

, ree ‘gpediiie statutes,

ecommerce’ frais ‘and the

- sion "het. rm otherwise have fallen within the ;

. exemption. ;

Mr, O’Manonny.* *'* th'asating [the Me-

‘Carran Act] we.sought t apie 60 out each |

a Sc a iileieral Gatien AA ee

to preserve intdet from any federal intrasion based on

~sPhere’ iw ovidenée, “hewéyer, that. the. role of, the. B.C. had

on. the subj of.

Je OL EA Ok UGE easy |

«pe 6, at 640 (1944); oe aoe ae Tith Cong., Ist Seas, at op

3 = and n96-(1981). ;

the commas la . atiatenil pow State mandi

| ei nce. industry;: The commerte clause -

| s used asa springboard for. federal regu-

| ation, sha elms of specific statutory. reference to

_’ insurance, By, enacting. the McCarran Act, Congress

“olearly. put the full weight, of its power. behind exist-

ing and future state legislation, to sustain it from any

- attack, under the commerce clause to whatever extent

this may be done-with the force of tliat power behind” °

it, subject only to the exceptions: expressly provided.

for.'' Prudential. Insurance C6, v. im, supra, at ~

431, The major proponent of the. bill, Senator McCar-

“pan, himself. this same point: av anecting. this,

law, Congress. held: out. an invitation to the Sta |

deal affirmatively and effectively. with ‘those pier tp

arid practices of the insurance. business which might

- otherwise be subject of federal regulation.” McCar- -

Bo. Federal Control of: Insurance, 34 A.B.A.J. 539,’

540 (1948). See also Donovan, Regulation of Insur-

ance under the McCarran Act,. 15 Law & Contemp.

Prob. 473; 490..(1950),

The State of: Arizona socepted the invitation of

jit poses of. this petiole’ is the.

aie le inten 1 the business of.

Congr gg Ag esse of Congress

Gages a et Aefining, or

Ererding for the Sctormination -of, ‘all such’

"$445

¥ ob ap Pipe

wenn

f ?

ae

136

~The séction of: the Arizona Terran Ge ming

1% CL REOT is

‘. finds the plan or agreement ek: eel

1, Is conteary to law. ; :

. _ 2 Inequitable. to ‘the the. stockholders of: any

domestic insurer involved. .

3. Would substantially reduce’ the’ security ;

and: service to be rendered to ‘policyholders of -

the domestic insurer in state or elsewhere. .

C: If the director’ does. not: approve the plan

or Sprooment he shall so, notify the insurer-in -

Mika My ay his reasons Enereton. Ariz,

tat.’ § 20-731 (1969) 6 0s

The State of Arizona has afirmatively: ancerted its ;

power to regulate the ‘merger’ of insurante “dom:

panies. It has not merely deemed’ ‘Stel “mhergers’ to bé

‘legal,’ nor perfunctorily incorporated by, eferente

‘corporate merger provisions,,,but has: set. out ‘addi-

tional ‘standards and empowered a state agent to en-

force, ceed The fet: tliat erapiersigetieh high

; eae mak 05 ral BT wey ry

sf = *« *.- B-a

vii i ‘eledtivé' sai

“sper seit rnin for tans ‘but ‘bthef Wise:

eaves the section intact: Sus

°

err pale Te is) not:

‘tees wa | is shed: Sh Turaseaggot, 9 OR

ment of the Securities Acts’ Amendments of 1964, |

78 Stat, 565 (1964), effective in 1966, insofar as their

legislative history displays Corigress” current under-

standing of the seape of the McCarran Act®

- ¥ See’ ‘to the same effect, ‘cominnunication to the Yale bw

Sournal from Senator dated April 91, SE a

Be ag: Yale LJ. ‘160% 68, n.11 (1951). °

:

(G) of |

@ (a)

surance company” ay et e dg Bi com-

yi eeanlena 4

mn;

lw cee = erm es

by an; in- et

soatensihe to demonstrate their, ability effectively to protect the —

_ investors as well as the ‘policyholders, The committee amend-

~ ment ives these State com isles thi oporanty vo tod

1965 U.8. Code Corig.’ Al News $018,

715° US.0. fy tb) ta ay)” ‘provides iar’ provisions

of the aubjest eect shall not apply in respect e

eee ‘oy! Wl theharatlén Caortile tselpay if ial‘ of

. the following pes Aegan MISA: To torte gilt :

jc /4 (i) Sih, dimentadee, cdmpany is. zequired. @-, and’ does

file an annual staterhent with the Commissioner-of-Insur- sf

8 eit ‘(ok Other offider ot 5 -perforitting's similar ‘func-

tion)’ ‘of "ite ‘d6tificifiary S and such’ ‘annual statement

i

"gene > may “ Pe bibiatieend ti tnpeldewpashinen

ne ee ee ea

¢ sbtit

i ‘dtiw gait Jeamo> uoiithegs! bataube attoxts to sisie sdf

ABLE z £3 : 1 with. 49%). .2f noitibs oO

——oSoeoo = -—— ——— ee ey ———

i 76 eee ay 9 © > paar

Beeb a ® 16a es 2

Re : fhe Cominities Report indicates the ostitimued sclic-

‘tude of the Congress for state! regulation: of the in-

ee ee practices, selted to insur-.,

. @hee-stoeks. . o+-/ metas ot to sititye ore iy

OT We are: oot ren te 6 views exprisced by the

“Gis ne ey

aed bd T yh rn

eaters

pro

aft fi; pt

, 23 4@0 AWS

itt purpose.

a lt hy BRA s ns

ae. may: Pig «

c. ay 3 she sarees ar

‘The jadgment Ned fre ished

ron guieitiaat olt bobo at

Uiited ‘States Court of Appeals for the Ninth Cireuit

7 “Gee ‘AND_ pneu "scatman, APPELLANT

- joiet MATIONAL, Saourrmies; Ivo., xr Alay, APPELLEES:

~ SPMESAT TTT es i Sa n igde vo

‘1G: Appeal. from .the, United States; Distriet Court for

he District of: Arizona. 41a #ig SHoltifirs:

Bit a Aeon came on tobe heard-on: the’ ‘Transcript of

Solera 1 att Ato Asedser fii

ition’ im respect of. securities. iemued-by ouch: company and

: sie por eetony tar tom beg?! nn st id a Na-

The art of ite siioiel lecteletion easing with euch |

conditions. Ste Aris. Rov. Stat.’ § 20-148.

a

the Record from the Unitéd States District Court

for the District -of eae 2 was duly submitted.

On ‘consideration. is now here ordered

and adjudged by this ‘Co eal the judgment ofthe

anid Ditriet Court; in: this Denpac bes sem8 berets %

ee rs ‘and entered Ne ov. 4s 1967.

ef : ,

Py PE “it # TeAd } o ™)

Z ITA, te at Mae: «THY Sf.

3 X¢ 3 t Zz t } ‘4 a“ i > ; Bf $ =

- 4 ti ) ' ne tt - rif ad

LY LRU j eh. 4 w0f i ragasedkd cy

z 7 ¢ , i

PARA LE Aa] sraaand JAY oscrnral {.

j Ke net jae ft serrt ate li

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ye tipsd {

ae , ke yee s nine oe... “Mg tri paley ; . 2 .

a oe pyar tt 1 -4b553- i SOE ADEE i iter feiss pitt

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) efi DEAL chs ed perdido FF oy srseerhaie A -

as ; : .

ey

ppc et aa 0

‘Unltd States. Distetet Court, District of Aritona

| @

Gv No. 466 Phx.

pees AND EXCHANGE Oonnmas, PLAINTIFE

a

Nationa Saoenera, INO. A CORPORATION, Nation at

Lire & Casvanty Insunanon OCoMPANY, A CORPORA-

TION, Rosser H. Watiacs, Roszrr 0. Boxannay,

i Jn, Aproon W. Sarrant, Tep Witxins, Joxun S..

Barearr, Joenpx B. Surran, Bremren W. LARGE,

: Je. and Propvcsrs Lirz Insurnancp Company, A

CORPORATION (ALSO KNOWN<as National Propvomrs

Lira INSURANCE ComPany), DEFENDANTS.

_ QRDER ON DEFENDANTS’ MOTION FOR

JUDGMENT ON THE PLEADINGS OR, IN’THE

__ ALTERNATIVE, FOR SUMMARY JUDGMENT.

The cause having come before the Court upon

defendants’ motion for judgment on the pleadings or,

in the alternative, for moray A judgment; and the

motion having been submitted or decision upon the |

record. and briefs on file; and’ it appearing to the

Court that: -

*

[1] 1: A motion’ for judgment on ‘the pleadings _

“under Rule 12(c) of the Federal Rules. of Civil Pro-

cedute raises the identical issue posed by a motion

under Rule 12(b) (6),.namely, whether the complaint

states a claim upon which relief can be granted [see:

Feild 'vs: WasbbanrOo;; 245 P0715 (ths Cir

1a

108

1044) Art Matal Onstration Go for Ue ot eCte a

so mailed) allegedly ‘contained positive misrepresenta-

tions of material facts; and also failed to state ma-

terial facta necessary to make the statements therein

not misleading: in ‘light of Ray eee

which they were made; ECT gal

“& Tho domplaiat prays for injure Flt, and

- aleo demandae- vo :

Producers. Life, National

holders ‘and ‘the defendant#'to

, pier more condition Whieli they oven

1S USO. »), and {7 OF :

- Ash, 5 UBC. $80), a, al 4 nd

iahemeat 0 thesis hel ps of Produoors Lif |

'. have resulted -in damage to. such, staekholders,

and the extant: to to which the defendants have

ww

Bae ). bean auijustly.. enriched ai:th> fof gach ~*~

ay: tie Baar pnd,.,¢hat,, le, ;

lstobe ; {*

-- caitivupeidgral the & re

' panies. involyed. has, never. -been registered on any

national seeurities. exchange; |.

. - ~~ ‘ .

110 ; on 7

. > : 2 ~

° x bai 4 j

—

0". oOnitit:

oT ti the jsubordigatinn. “6

(c-(cotber ganitieg | of,

ail | | Of the" defendiitite! Anode GFF 16 etn Q12 :

‘That the! Gormission may Jhave: ‘all! farther

\omelief. that the Opurt may..deem.just, equitable, |

canes end necessary in the circumstances ;,... ,

itis Daastaete ‘eon plained: of ». would ~ fall: ‘eéithiixi. the

prohibitions ofthe proxy-solicitetion-anti-fraud : pro-

vision of § 14-of the 1934 Act :[15:0.8.C: § 78n}, as

implemented: by Rule 14-9 {17. CFR: 240:14a-Q], but

for the fact that the stock-of the insurance; com-

H% ~~ until sometime during oo will a i rei

aoe a hie al : 11200)

3 Sein wing: ©

-h1qn “paion to the -jutrinfiotionsalithe Bemmibieet and

c |

cy. (Sixebapge Commission in,

ner vol of, the - a

“74641 baheh Gan Me ’

10 Oia et iot , > oft

is. : & he left tothe States: [House Report

ropes No. '1438; May’ 19;:'19647:196% U.8i ode Cong.,

iat ereigricn ; 3022}; © icte ghileenes Tc -

ven if it be ‘assumed | a S1o(b) 5 would other- }

pe. ‘beunetedie Joy. Proxy, soligitations: [but see

Borak:‘v. ‘51. Case:Oo., unreported: in’ the:

Court, 317 F.2d 838, 846-947 (‘7th Cir. 1968), ‘aff’d on

_ Other | grourids, sib rom. J. I. Case Co: v. Borak, 377

U.S. 426, 84 S.Ct,/1555, 12 L.Ed2d 423 (1964)], and

that a shareholder-approved corporate . consglidation |

and reorganization is a ‘‘purthase or, gale” of securi-

‘ties within thé! meaning of § 10(b);and! Role 10b-5

[compare og LL. Green’ '@o: vi: ‘Childree, 185°. F.Supp.

95 (SDN, 1960), and Voege' V?. American’ ‘Sumatra

Tobacco “Chip... 241 F. Supp. 369 (D (D,Dela.1965), with

National Supply Co. v. Telend Stanford Jr. University,

184 F.2d 689 (9th Cir. 1943); and Sawyer v. Pioneer

Mill Co., 190 F.Supp. 21 (D.Hawaii 1960), remanded

300 F.2d 200 (9th Cir. 1962), cert. dem, 371: U8.

814, 83 S.Ct. 24, 9 L.Ed.2d 55 (1962)], there still re-

-Inains the question of ‘whether the McCarran Act [59

Stat. 33, 15. U.S.C: §§ 1011-1015] does not preclude

the application i in this. case of § 10(6), as a

8° Rule 10b-5 ;. Ae

8. 15 US. C. §1012(b) states, ‘in party”

No Met. of, gh

Ry. any Btate, ‘tort urpose OF of-regulayine the |

Bafa, pig essed se

3 mpiniey 15

9, The tawiof Arivotia” requires that tlist ‘amy’ proposed —

pai (Gf Btowk iikertFeintd companies ve maeatied to

Ahh ss pepe » of} insurance '

-

f rime, : a

Eye eS

aetna

te y

fit “nite Staion iin a it i

petty Aen BOM: St i om : fag i

bs aif t Conmaise der sh Hi; ,

Be i:

hs creme. . 4, ar e

hig my $s s

te ea ay 8 ie ce sue i; 0: Lee Recta Minas

ae of : the ASKS oh PAAInDIE' edt

hers torn :

; ovine ra Loos

[2] a9One Be agar el mt = s

| plemenéal Camplaia}st bar, if bea ene | meee? are

againdt’ fituiws violations: of “6 10¢ =

suid four vation of $2000) HE AS |

’ of the cofporate merger, now finally appfoved by. the:

‘Arizona Djreetor of Insurance pursuant to: ARS. .

~ §20-731,.would at least’‘‘impair”;:if not “invalidate”

_ or “supercede’’, laws énacted by'the State of Arizona.

' ‘for the: purposé of regulating the business of insur-.

arice”’, within the meaning of the applicable provisions

of the McCarran ‘Act [15 U.S.C. §.1012(b)}; and . .

[8] --13.. Finally, plaintiff’s. , ’ for relief als *—-

; legedly “necessary to rectify-and correct the conse--

ome onwtien aedeeitropstelbor

defendants”, includes a prayer for an : ee gun

unjust enrichment end other relief, which rouge 3

“Gs0 ( )5

Se ‘inappropriate. (cf. Note, pa

.. abe see; IIL Loss, “Securities Regulation 1824-1829"

(2nd Ed. 1961)+@ary, Book Review, % Harvi.Rev.

857, 861°(1962) “open oer fall boi.

Se cepa ok erothahas Pitot : ir SATte) of he

c 1984 Act [15 U.S.C. $ 78u(e)]5_

Accordingly, it is. ordered ° ‘detendants’ motion

aie for jelgvasst on tha platings beaoribeipaaied 7

It is further orderéd that ‘defendants serve and

Todge with the Clerk of the: Court withit: tet days

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engage in any: or course |

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