Name: Blau v. Lehman — Opinion of the Court
Author: Hugo Black

Quotes from Blau v. Lehman — Opinion of the Court (Hugo Black)

Hugo Black, Blau v. Lehman — Opinion of the Court

“ It was Thomas, not Lehman Brothers as an entity, that was the director of Tide Water.
(b) It is next argued that the intent of § 3 (a) (9) in defining 'person' as including a partnership is to treat a partnership as an inseparable entity. [9] Because Thomas, one member of this inseparable entity, is an 'insider,' [10] it is contended that the whole partnership should be considered the 'insider.' But the obvious intent of § 3 (a) (9) , as the Commission apparently realizes, is merely to make it clear that a partnership can be treated as an entity under the statute, not that it must be. ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ The language of § 16 does not purport to impose its extraordinary liability on any 'person,' 'fiduciary' or not, unless he or it is a 'director,' 'officer' or 'beneficial owner of more than 10 per centum of any class of any equity security * * * which is registered on a national securities exchange.' [6] Lehman Brothers was neither an officer nor a 10% stockholder of Tide Water, but petitioner and the Commission contend that the Lehman partnership is or should be treated as a director under § 16 (b) . ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ The evidence showed that Lehman Brothers had in fact earned profits out of short-swing transactions in Tide Water securities while Thomas was a director of that company. But as to the charges of deputization and wrongful use of 'inside' information by Lehman Brothers, the evidence was in conflict. ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer if the issuer shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ These firms it is claimed will be able to evade the Act and take advantage of the 'inside' information available to their members as insiders of countless corporations merely by trading 'inside' information among the various partners. ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ Eighteenth Annual Report, p. 79 (1953) . These reports were submitted to Congress.↑ Securities and Exchange Commission Release No. 4754 (September 24, 1952) , Rule X-16A-3 was again amended effective March 9, 1961, to delete any requirements that a partner report the amount of the issuer's securities held by the partnership but the substance of the rule is still contained in the Commission's instructions to its Forms 3 and 4 which are used for making the reports required under § 16 (a) . ”

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Source: Wikisource

Hugo Black, Blau v. Lehman — Opinion of the Court

“ Despite its recognition that Thomas had specifically waived his share of the Tide Water transaction profits, the trial court nevertheless held that within the meaning of § 16 (b) Thomas had 'realized' $3,893.41, his proportionate share of the profits of Lehman Brothers. The court consequently entered judgment against Thomas for that amount but refused to allow interest against him. On appeal, taken by both sides, the Court of Appeals for the Second Circuit adhered to the view it had taken in Rattner v. ”

Hugo Black

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Quotes from Blau v. Lehman — Opinion of the Court (Hugo Black)

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Hugo Black

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