# Brief for Respondent — Supt. of Insurance v. Bankers Life & Cas. Co.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0318%3A09

## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for Respondent
- **Published:** January 1, 1971
- **Citation:** 404 U.S. 6

## Text

gressional action aiid not) judicial interpretation. Policyholders and |
creditors.as distinguished from investors are not persons covered
by sections 17(a) or 10(b) as they are presently written.

Petitioner's complaint as amended by his briefs in the Courts
below alleges a claim over which the federal courts should not
have jurisdiction:

An unrestricted application of rule .10b-5 is, however,
also-i inconsistent with the purposes of the rule. The most —
liberal view, often. expressed by.the Commission, is chat
anyone who is damaged by a ‘fraudulent transaction

should be allowed to seek relief under 10b-5. This view
would lead to almost unlimited liability. As.an illustra-
tion, assume a defendant defrauds XYZ. Corporation in
a securities transaction, causing XYZ Corporation ito go
into: bankruptcp. Following the SEC viewpoint, the
stockholders of the corporation would be permitted to
recover the loss in market value of their stock and, per-
haps, even the creditors. of the corporation would-be
permitted to recover their loan losses. Such broad cover.
» age under section. 10(b) was not the intent of Congress;
the antifraud provisions were adopted to protect, the
‘trading process in the securities markets, not to provide
‘’ a federal remedy for every injury that might in any way ©
we be connected with. a securities fraud.*

*Boone and McGowan, Standing to Sue Under SEC Rule 106-5, 49 Texas L. Rev.
617, 622 €1971) a

_ CONCLUSION | |

“The judgment of ie ‘Court of Appéals should be affirmed.

. -Respectfully submitted,
KEVIN SEITS, |
BASCH SEITS AND SHAPIRO, _
“OFC Counsel. :
. WILLIAM fievise: .
C¢ ounsel for Respondent

oe - Garvin, Bantel 8 Company
_ August 31, 1971 ° _

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OcrozEr TERM, 1971

Superintendent of Insurance of the State of N ew York, as Liquidator
of MANHATTAN CASUALTY COMPANY,

‘Petitioner,
v.

BANKERS LIFE AND CASUALTY COMPANY, ET AL.,

Respondents

On Writ oF CeRTIoRAaRI TO THE UNITED States Court oF
’ APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR RESPONDENT =
_ BANKERS LIFE AND CASUALTY COMPANY

IRVING ‘PARKER,
Counsel for Respondent
. Bankers. Life and
Casualty C. ompany,
70 Pine Street,
New York, -New York 10005

. ‘ a :
WiLttaM T. Kirsy,

- Isaac M. Baypa,

Jacogs PersiNcer & PARKER,
Of Counsel.

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INDEX

| PAGE
Preliminary Statement ......... Me ccuaxes ee eeu . 1
Questions Presented ..:.. acne eee Gpasweenwespee ~2 >
Counterstatement of the Case ee ee tveteses 3)
Argument: . « - _ © |
Point, I |

Petitioner has failed to allege, or show any facts

in support of, any claim against Bankers Life;

federal jurisdiction does not exist as to it,...... 7

~ Point I

- Petitioner, as liquidator of Manhattan, cannot
maintain an action on behalf of Marihattan based

upon the alleged fraud of Manhattan’s sole stock- .

holder; moreover, there is*no allegation or show-
. ing of any injury to any party entitled to protec-
tion of the federal securities laws and; accordingly,
federal jurisdiction does not exist over the subject
, matter OFS BCHON ft cate een ess

” ie Petitioner, as liquidator of Manhattan, can-
not maintain an action on behalf of Manhattan

- based upon the alleged fraud of Manhattan’ S
sole stockholdet ..............-. 0002-008.

B. Petitioner and the SEC have pisconettaed the

reasoning of the court of appeals.and over: |

looked the fact that in reaching its decision

the court; below correctly interpreted and ap-.
plied the legislative purposes of the federal -

securities laws; furthermore, there is no
allegation or showing of any injury to any
person entitled to protection of the federal

securities WG os ree ieee eee ee

14

i
cu oe a PAGE
’ Point III | | |
. Petitioner mistakenly contends that this Court in
this case should review the purchaser-seller re-
quirement of Birnbaum v. Newport Steel Corp:;.:

- even if that requirement is reviewed, there would
be no valid basis for altering the conclusion

reached by the court below .............5. are vs
Point IV, | - oe
The writ of certiorari’should be dismissed ..... 20
Conclusion shin cpewneeevesgets isuasnewes eee (22

= / TABLE OF AUTHORITIES _ -

TABLE OF Cases:

SOR

, &

~ Bailes V: Colonial Press, Inc, No. 29048 (Sth Cir.

June 15, 1971)... cece eee e eee eee ees 13, 16, 18, 19
_ Barnett v. Anaconda Co., 238 F. Supp. 766 (S.D.N.Y.

1965) vo sce ceeeeevevuventetebeceeceeeeeees - 16

; Birnbaum v. Newport Steel Corp., 193 F.2d. 461

(2d Cir.) cert. denied, 343 U.S. 956 (1952). .15, 17,
~ 18, 19, 21

Blau v. Lehman, 368 US. 403 (1962) ....-:.... 22

Cohen v. Colvin, 266 F.Supp. 677 (S.D.N.Y. 1967). . 15.
* Dasho v. Susquehanna C orp., 380 F.2d 262 (7th =

Cir.), cert. denied ~ nom. Bard v. Dasho, 389
~ U.S. 977 (1967) . cebaseecreeass wee ene s 19

a v. Harcey, No. 35077 (2d Cir. July 21,
FO pep ees os ok ee ee ee ens

Erling v. Powell, 429 F.2d 795 (8th Cir. 1970) . 19

Field v. Lew, 184 F.Supp.. 23 (E.D.N.Y. 1960),
aff'd, 296 F.2d 109 (24 ‘Gir ae cert. Gees,

369: US. S59 (2962) 2. Mos. 12

General Hatters S “ply Co.v. H artman, 148 N.Y. S,
2d 90 (Sup. Ct. N. Y. Co. 1955) rebates M..... 12

ar eige-4

iii
; . . ., PAGE
Herpich v. Wallace, 430 F.2d 792 (Sth Cir, 1970) .15, 19
Hoover v. Allen,.241 F.Supp. 213\(S.D.NY. 1965) 16

Iroquois Industries, Inc. v. Syratuse China Corp., .
417 F.2d. 963 (2d Cir. 1969F, cert. denied, 399
U.S..909 (1970) 2... cc cccccedcccacecces 18, 19

Mader v. Armel, 402 F.2d 158 (6th Cir. 1968), cert.
. denied sub nom. Young Y. Mader, 394 staat

+ 930 (1969)... ae oe ae ren "19

O’Neill v. Maytag, 339 F.2d 764 (2d Cir. 1964)a.. 15

- Pettit v. American Stock Exchange, 217 F.Supp. 21.
"2 (S.D.NLY. 1963) oo ccieceeeeecececee secs ees 16

SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d
Cir. 1968) ‘(en banc), cert. denied subpnom. Coates

V. SEC, 394 U.S. 976 (1969) «0.0.5. . ces e ec enee 21
The Greater Iowa C orp. V. McLendon, 378 F. 2d 783
“(Bt Cir, 1967) 02 ceescseecengeceeens we. 19

_ TABLE OF STATUTES AND Rutes:
Securities Act of 1933, Section 17 (a), 1s" USC.

§77q(a) ...... ee eT ee ee 5, 11
Securities Exchange Act of. 1934, Section 10(b),°
15 U.S.C. § 78j(b) ........5...5, 11, 12, 16, 17, 2]

Federal Rules of Civil. Procedure:
— Rule 12(¢) le veesticcessnxtnans Seatie seen ss 4
‘Rule 12(h) ......... rere oo ere oer eess 629

Securities and Exchange Commission Ruiles:
Rule es 55 17 C.F.R. 240.10b-5 ....5, 12, 13, 14, 16,

18, 19, 21
| New York Civil Practicé Law and Rules: oe
Rule 3117(c) ...........0.0.. pawwes errr 6
MISCELLANEOUS: --
Boone and McGowan, S$ tanding To Sue Under SEC |
Rule 10b-5, 49 Texas L. Rev. 617 (1971) ri akavs »° 56.
f. |

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Supresie Conirt of the United States

OctosER TERM, 1971

No. ar a P

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On Writ oF CERTIORARI TO THE UNITED STATES CouRT
‘ oF APPEALS FOR THE SECOND CIRCUIT — un.

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© g a ad 7 , ‘ a -

ae BRIEF FOR RESPONDENT’ =”
BANKERS LIFE AND eee coMeaty

nw ns

Preliminary Statement rind

= >

This brief is submitted on behalf of respondent Bankers ,
Life and. Casualty Company (“Bankers Life”) in answer »

_ to the brief. of petitioner, the Liquidator of . Manhattan

Casualty Company (“Manhattan”), and the brief for the

Securities and Exchangs Commission (“the SEC”) as

*s

vr e.,

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0318%3A09. Public record. Not legal advice.