blau
lehman
argued
decided
january
petitioner
stockholder
corporation
stock
registered
national
securities
exchange
sued
securities
exchange
act
recover
behalf
corporation
one
directors
partnership
member
profits
realized
purchase
sale
partnership
stock
corporation
within
period
less
six
months
petitioner
alleged
partnership
deputed
director
represent
interests
corporation
board
directors
reason
inside
information
caused
partnership
purchase
stock
corporation
district
found
allegations
supported
evidence
partnership
bought
stock
solely
basis
corporation
public
announcements
without
consulting
director
accordingly
denied
judgment
partnership
director
full
amount
resulting
profits
awarded
judgment
director
proportionate
share
partnership
profits
transactions
without
interest
appeals
affirmed
respects
held
judgment
affirmed
pp
findings
courts
disputed
factual
issues
clearly
erroneous
conclusions
law
sustained
pp
partnership
neither
officer
stockholder
corporation
held
liable
director
pp
findings
courts
accepted
preclude
finding
partnership
actually
functioned
director
corporation
partner
deputized
partnership
perform
director
duties
partnership
pp
fact
defines
person
including
partnership
require
entire
partnership
held
liable
insider
merely
one
members
director
corporation
extend
coverage
include
partnership
director
member
pp
courts
properly
held
director
liable
profit
realized
profits
earned
partnership
transactions
pp
denial
two
courts
interest
amount
director
held
liable
neither
unfair
inequitable
require
upset
morris
levy
argued
cause
filed
briefs
petitioner
whitney
north
seymour
argued
cause
respondents
tide
water
associated
oil
company
briefs
benjamin
milner
robert
carlson
allan
conwill
special
leave
argued
cause
securities
exchange
commission
amicus
curiae
urging
reversal
briefs
solicitor
general
cox
john
davis
walter
north
ellwood
englander
david
ferber
bruce
bromley
filed
brief
american
society
corporate
secretaries
amicus
curiae
urging
affirmance
justice
black
delivered
opinion
petitioner
blau
stockholder
tide
water
associated
oil
company
brought
action
district
behalf
company
securities
exchange
act
recover
interest
short
swing
profits
profits
earned
within
six
months
period
purchase
sale
securities
alleged
realized
respondents
tide
water
securities
dealings
respondents
lehman
brothers
partnership
engaged
investment
banking
securities
brokerage
securities
trading
account
joseph
thomas
member
lehman
brothers
director
tide
water
complaint
alleged
lehman
brothers
deputed
thomas
represent
interests
director
tide
water
board
directors
within
period
six
months
thomas
representing
interests
lehman
brothers
director
tide
water
reason
special
inside
knowledge
affairs
tide
water
advised
caused
defendants
lehman
brothers
purchase
sell
shares
stock
tide
water
realizing
profits
thereon
inure
recovered
tide
water
case
tried
district
judge
without
jury
evidence
showed
lehman
brothers
fact
earned
profits
transactions
tide
water
securities
thomas
director
company
charges
deputization
wrongful
use
inside
information
lehman
brothers
evidence
conflict
first
testimony
respondent
thomas
succeeded
hertz
another
lehman
partner
board
tide
water
hertz
joined
tidewater
company
thinking
going
interests
lehman
brothers
suggested
thomas
successor
partly
interest
lehman
also
testimony
however
thomas
aside
mentioned
time
time
partners
people
thought
tide
water
attractive
investment
good
management
never
discussed
operating
details
tide
water
affairs
member
lehman
brothers
lehman
bought
tide
water
securities
without
consulting
thomas
wholly
basis
public
announcements
tide
water
common
shareholders
thereafter
convert
shares
new
cumulative
preferred
issue
thomas
know
lehman
intent
buy
tide
water
stock
initial
purchases
made
upon
learning
purchases
immediately
notified
lehman
must
excluded
risk
purchase
profit
loss
subsequent
sale
disclaimer
accepted
firm
foregoing
testimony
district
found
evidence
firm
lehman
brothers
deputed
thomas
represent
interests
director
board
tide
water
actual
use
inside
information
lehman
brothers
bought
tide
water
stock
solely
basis
tide
water
public
announcements
without
consulting
thomas
basis
findings
district
refused
render
judgment
either
partnership
thomas
individually
profits
determined
lehman
brothers
realized
holding
law
well
settled
mere
fact
partner
lehman
brothers
director
tide
water
time
lehman
brothers
short
swing
transaction
stock
tide
water
sufficient
make
partnership
liable
profits
thereon
thomas
held
liable
profits
realized
partners
firm
short
swing
transactions
rattner
lehman
precise
question
passed
upon
rattner
decision
supp
petitioner
apparently
seeks
us
decide
questions
presented
though
proven
allegations
complaint
lehman
brothers
actually
deputized
thomas
represent
interests
director
tide
water
advice
counsel
based
special
inside
knowledge
tide
water
affairs
caused
lehman
brothers
buy
sell
tide
water
stock
trial
found
otherwise
appeals
affirmed
findings
inferences
perhaps
drawn
evidence
support
petitioner
charges
examination
record
makes
clear
us
findings
two
courts
clearly
erroneous
moreover
agree
commission
courts
determinations
disputed
factual
issues
conclusions
law
rather
findings
fact
must
therefore
decide
whether
lehman
brothers
thomas
absolute
liability
pay
profits
made
lehman
tide
water
stock
dealings
even
though
thomas
sitting
tide
water
board
represent
lehman
even
though
profits
made
partnership
initiative
independently
advice
inside
knowledge
given
director
thomas
first
language
purport
impose
extraordinary
liability
person
fiduciary
unless
director
officer
beneficial
owner
percentum
class
equity
security
registered
national
securities
exchange
lehman
brothers
neither
officer
stockholder
tide
water
petitioner
commission
contend
lehman
partnership
treated
director
although
admittedly
literally
designated
one
contended
lehman
director
doubt
lehman
brothers
though
partnership
purposes
director
tide
water
function
deputy
since
act
provides
person
means
partnership
director
means
director
corporation
person
performing
similar
functions
respect
organization
whether
incorporated
unincorporated
consequently
lehman
brothers
director
tide
water
petitioner
complaint
charged
lehman
actually
functioned
director
thomas
deputized
lehman
perform
director
duties
lehman
findings
two
courts
accepted
preclude
holding
thomas
lehman
brothers
entity
director
tide
water
next
argued
intent
defining
person
including
partnership
treat
partnership
inseparable
entity
thomas
one
member
inseparable
entity
insider
contended
whole
partnership
considered
insider
obvious
intent
commission
apparently
realizes
merely
make
clear
partnership
treated
entity
statute
must
affords
reason
construing
word
director
though
read
partnership
director
member
fact
congress
provided
partnership
treated
entity
right
likewise
offers
support
argument
congress
wanted
partnership
subject
responsibilities
financial
burdens
members
carrying
individual
business
activities
petitioner
commission
contend
policy
grounds
lehman
partnership
held
liable
even
though
neither
director
officer
stockholder
conceding
interpretation
justified
literal
language
plainly
limits
liability
directors
officers
stockholders
argued
expand
cover
partnerships
director
member
order
carry
congressionally
declared
purpose
preventing
unfair
use
information
may
obtained
beneficial
owner
director
officer
reason
relationship
issuer
failure
argued
leave
large
unintended
statute
one
substantially
eliminating
great
wall
street
trading
firms
statute
operation
firms
claimed
able
evade
act
take
advantage
inside
information
available
members
insiders
countless
corporations
merely
trading
inside
information
among
various
partners
argument
petitioner
commission
seems
go
far
suggest
forfeiture
profits
extended
include
persons
realizing
short
swing
profits
either
act
basis
inside
information
possibility
inside
information
one
may
agree
petitioner
commission
present
persuasive
policy
arguments
act
broadened
way
prevent
unfair
use
information
effectively
accomplished
leaving
act
require
forfeiture
profits
specifically
designated
congress
suffer
losses
broadening
categories
persons
liabilities
imposed
language
considered
rejected
congress
passed
act
drafts
provisions
eventually
became
made
unlawful
director
officer
stockholder
disclose
confidential
information
regarding
registered
securities
also
made
profits
received
anyone
insider
unlawful
disclosure
made
recoverable
company
congress
refuse
give
content
urged
put
interpretation
knowledge
second
circuit
appeals
refused
rattner
case
apply
lehman
brothers
circumstances
substantially
like
congress
left
act
far
record
shows
interpretation
view
commission
intervened
last
year
case
indeed
rattner
case
appeals
relied
part
commission
rule
required
report
amount
holdings
amount
holdings
partnership
commission
since
changed
rule
require
disclosure
partnership
holdings
official
release
explaining
change
stated
new
rule
intended
modification
principles
governing
liability
transactions
section
set
forth
case
rattner
lehman
congress
might
amend
commission
present
policy
arguments
presented
us
think
congress
proper
agency
change
interpretation
act
unbroken
since
passage
change
made
second
petitioner
commission
contend
thomas
required
individually
pay
tide
water
entire
profit
lehman
brothers
realized
ground
partnership
law
entire
undivided
amount
therefore
realized
nly
holding
liable
entire
profits
realized
firm
urged
effective
prophylactic
stated
statutory
policy
fully
enforced
liability
determined
neither
general
partnership
law
adding
prophylactic
effect
congress
clearly
prescribed
section
leaves
room
judicial
doubt
director
pay
company
profit
realized
transactions
emphasis
added
nothing
fiction
say
thomas
realized
profits
earned
partnership
member
error
refuse
hold
thomas
liable
profits
make
third
contended
courts
erred
failing
allow
interest
recovery
thomas
share
partnership
profits
section
says
nothing
interest
one
way
said
kindred
situation
interest
recovered
according
rigid
theory
compensation
money
withheld
given
response
considerations
fairness
denied
exaction
inequitable
board
commissioners
courts
denied
interest
say
denial
either
unfair
inequitable
require
us
upset
affirmed
footnotes
purchase
sale
question
lehman
brothers
participated
underwriting
tide
water
bonds
thomas
handled
lehman
course
matter
discussed
tide
water
affairs
members
lehman
compliance
rules
forms
thereunder
see
note
infra
thomas
filed
sec
reports
lehman
transactions
tide
water
stock
disclaimer
transactions
courts
defendants
claimed
lehman
profits
found
much
less
since
determination
complained
necessary
pass
contentions
two
courts
contended
thomas
disclaimer
participation
partnership
transactions
realized
profits
also
even
realize
profits
amount
less
found
see
opinion
judge
swan
dissenting
part
express
view
questions
since
thomas
judgment
challenged
see
stat
stat
stat
commission
brief
says
therefore
member
partnership
holds
directorship
knowledge
consent
firm
entirely
reasonable
consider
partnership
director
purposes
section
insider
purposes
officer
director
stockholder
see
cook
feldman
insider
trading
securities
exchange
act
harv
rev
mosser
darrow
lehman
civil
aeronautics
board
app
cited
commission
comparable
situations
throw
little
light
issues
case
cases
involved
different
facts
different
statutes
statutes
different
language
purpose
history
statute
thus
sess
provided
shall
unlawful
director
officer
owner
securities
owning
record
beneficially
per
centum
class
stock
issuer
security
registered
national
securities
exchange
disclose
directly
indirectly
confidential
information
regarding
affecting
registered
security
necessary
proper
disclosed
part
corporate
duties
profit
made
person
unlawful
disclosure
shall
made
respect
transaction
transactions
registered
security
within
period
exceeding
six
months
disclosure
shall
inure
recoverable
issuer
unless
person
shall
reasonable
ground
believe
disclosure
confidential
made
performance
corporate
duties
emphasis
added
see
seventeenth
annual
report
securities
exchange
commission
eighteenth
annual
report
reports
submitted
congress
securities
exchange
commission
release
september
rule
amended
effective
march
delete
requirements
partner
report
amount
issuer
securities
held
partnership
substance
rule
still
contained
commission
instructions
forms
used
making
reports
required
justice
douglas
chief
justice
concurs
dissenting
today
substantially
eliminate
great
wall
street
trading
firms
operation
judge
clark
stated
dissent
appeals
result
follows
wide
dispersion
partners
investment
banking
firms
among
major
corporations
lehman
partners
boards
today
ruling
firm
make
rich
harvest
inside
information
act
covers
partner
need
account
distributive
share
firm
profits
inside
information
partners
keeping
balance
mutilation
act
partnership
director
within
meaning
profit
realized
words
used
includes
profits
merely
portion
partnership
realized
inside
information
basis
reason
saying
partnership
director
purposes
act
rattner
lehman
judge
learned
hand
said
prepared
say
partnership
considered
director
adding
purposes
common
law
treat
firm
jural
person
view
partnership
might
director
within
meaning
deputed
partner
represent
interests
yet
formal
designation
significant
informal
approval
everyone
knows
investment
alliances
consciously
constructed
increase
profits
bankers
partnership
law
debate
long
raged
whether
partnership
entity
aggregate
pursuit
profitable
even
new
york
aggregate
theory
recognizes
partnership
may
considered
entity
purposes
easier
make
partnership
director
purposes
hold
opposite
section
speaks
every
person
director
person
defined
include
inter
alia
partnership
thus
purpose
subject
partnership
provisions
need
turn
strained
reading
section
root
present
problem
scope
degree
liability
arising
fiduciary
relations
modern
times
liability
strictly
construed
new
york
appeals
speaking
chief
judge
cardozo
meinhard
salmon
held
joint
adventurer
higher
standard
insist
upon
today
many
forms
conduct
permissible
workaday
world
acting
arm
length
forbidden
bound
fiduciary
ties
trustee
held
something
stricter
morals
market
place
honesty
alone
punctilio
honor
sensitive
standard
behavior
developed
tradition
unbending
inveterate
uncompromising
rigidity
attitude
courts
equity
petitioned
undermine
rule
undivided
loyalty
disintegrating
erosion
particular
exceptions
wendt
fischer
thus
level
conduct
fiduciaries
kept
level
higher
trodden
crowd
consciously
lowered
judgment
strict
prohibitions
serve
little
purpose
trustee
free
authorize
others
forbidden
charge
obvious
open
opportunities
devious
dealings
name
others
trustee
conduct
motives
man
complex
equity
separate
case
trustees
motive
acquiring
efficient
help
motives
favoring
help
reason
anticipation
counterfavors
later
come
think
trustee
right
right
authorize
transactions
forbidden
benefit
others
behalf
trustee
equity
sought
limit
difficult
delicate
tasks
concerning
trustee
precluding
transactions
reason
effect
often
difficult
trace
prohibition
merely
injuring
estate
profiting
position
trust
occurred
far
employees
concerned
undenied
forget
much
history
give
strict
narrow
construction
brandeis
people
money
spoke
office
director
happy
hunting
ground
investment
bankers
said
goose
lays
golden
eggs
considered
valuable
possession
even
profitable
privilege
taking
golden
eggs
laid
somebody
else
goose
investment
bankers
associates
enjoy
privilege
hearings
led
securities
exchange
act
replete
episodes
showing
insiders
exploited
personal
gain
inside
information
came
fiduciaries
therefore
asset
entire
body
security
holders
senate
report
labeled
practices
predatory
operations
said
among
vicious
practices
unearthed
hearings
subcommittee
flagrant
betrayal
fiduciary
duties
directors
officers
corporations
used
positions
trust
confidential
information
came
positions
aid
market
activities
closely
allied
type
abuse
unscrupulous
employment
inside
information
large
stockholders
directors
officers
exercised
sufficient
control
destinies
companies
enable
acquire
profit
information
available
others
see
also
today
allows
one
partner
share
feast
one
places
partnership
table
turn
offer
feasts
companies
directors
stan
rev
result
dilution
fiduciary
principle
congress
wrote
act
respect
dilution
possible
strained
reading
law
courts
given
fiduciary
principle
cordial
reception
leave
congress
task
restoring
edifice
erected
tear
appendix
opinion
justice
douglas
petitioner
lehman
director
pan
american
petitioner
joseph
thomas
director
national
airlines
american
export
lines
petitioner
frederick
ehrman
director
continental
air
lines
john
hertz
director
consolidated
vultee
aircraft
corporation
companies
referred
aeronautic
field
must
board
approval
kind
interlocking
relationships
made
unlawful
unless
approved
lehman
thomas
ehrman
hertz
others
also
members
lehman
brothers
partnership
previously
pointed
conducts
investment
banking
business
board
held
individual
lehman
brothers
partner
director
section
company
representative
another
partner
director
another
company
relationships
thus
found
exist
disapproved
involving
pan
american
national
pan
american
american
export
lines
pan
american
consolidated
vultee
national
pan
american
national
consolidated
vultee
continental
air
lines
consolidated
vultee
precisely
board
concluded
lehman
brothers
partner
director
air
carrier
representative
represents
director
director
another
section
company
another
lehman
brothers
partner
director
latter
coupled
circumstances
seeks
behalf
lehman
brothers
security
underwriting
merger
negotiation
services
used
company
director
underwriting
security
issues
conduct
merger
negotiations
constitute
substantial
part
business
lehman
brothers
employed
purposes
infrequently
section
companies
partners
feel
free
solicit
business
firm
must
consider
facts
case
light
purpose
congress
keep
developing
aviation
industry
free
unhealthy
interlocking
relationships
though
purpose
must
carried
statute
provides
relevant
findings
point
problem
dispute
underwriting
activities
lehman
brothers
substantial
part
business
substantial
fees
also
obtained
lehman
brothers
merger
negotiations
profits
fees
shared
partners
section
companies
lehman
brothers
partners
directors
need
use
types
services
partner
directors
seek
business
partnership
act
representatives
partnership
follows
act
representatives
fellow
partners
directors
air
carriers
representation
within
meaning
statute
thomas
use
case
illustrative
lehman
brothers
partner
also
director
national
airlines
represent
director
national
airlines
lehman
another
lehman
brothers
partner
director
pan
american
think
affirmative
answer
board
disturbed
situation
comes
community
interest
sharing
common
benefits
partners
particular
common
interest
benefits
among
directors
regulated
industry
respect
industry
matters
partnership
link
extend
merely
type
business
remote
aeronautical
industry
partners
directors
respect
business
activities
air
carriers
aeronautical
companies
enumerated
section
activities
literal
representation
one
partner
another
partnership
business
particular
partnership
business
well
business
aeronautical
enterprises
partners
directors
thomas
illustrate
director
national
seeks
guide
company
underwriting
business
lehman
brothers
acts
interest
benefit
lehman
underwriting
partner
also
director
air
carrier
pan
american
lehman
partner
lehman
director
board
required
separate
two
personalities
say
thomas
represents
partner
director
case
representation
regard
carrying
affairs
section
companies
undoubted
representation
grows
partnership
think
follows
directorships
transactions
engaged
partners
concern
companies
regulated
statute
partners
directors
representation
within
language
meaning
statute
rattner
decision
rendered
time
securities
exchange
commission
pursuant
regulatory
power
provided
reporting
requirement
allowed
disclose
amount
equity
securities
corporation
question
held
partnership
representing
proportionate
interest
partnership
rule
rattner
decision
rule
amended
read
partner
required
report
respect
equity
security
owned
partnership
shall
include
report
entire
amount
equity
security
owned
partnership
may
elects
disclose
extent
interest
partnership
partnership
transactions
cfr
cum
see
loss
securities
regulation
vol
pp
matter
schwartzman
app
div
aff
holding
partnership
legal
entity
purposes
unemployment
insurance
law
mendelsohn
equitable
life
assurance
misc
holding
attorneys
partners
one
person
purposes
rules
civil
practice
travelers
ind
unger
misc
holding
partnership
regarded
legal
entity
purposes
pleading
see
bernard
ratner
trucking
case
far
severe
impact
result
urge
held
partnership
criminally
liable
motor
carrier
act
said
congress
specifically
included
partnerships
within
definition
person
large
number
regulatory
acts
thus
showing
intent
treat
partnerships
entities
note
said
toucey
new
york
life
ins
indulging
merest
fiction
suggest
doctrine
first
time
asked
pronounce
eyes
open
light
full
consideration
obviously
firmly
part
texture
law
congress
effect
enacted
silence
occasion
regard
silence
congress
commanding
plainly
unmistakably
spoken
words
situation
congress
failed
act
requested
act
circumstances
congress
ordinarily
expected
act
provisions
never
subject
comprehensive
legislative
reexamination
even
exceptions
referable
legislation
incidental
features
statutory
schemes
removal
interpleader
acts
explicit
comprehensive
policy
act
left
intact
find
significance
congressional
nonaction
circumstances
find
significance
none
proper
approach
problem
interlocking
directorates
agency
investment
banking
house
expressed
judge
fahy
lehman
civil
aeronautics
board
app
case
involving
firm
see
appendix
opinion