For Your Data Blau V. Lehman Illustration Brief

Blau v. Lehman representative brief summary
368 U.S. 403 (1962)

CASE SYNOPSIS

The Court granted certiorari to the U.S. of A. Court of Appeals for the Second Circuit to attain upwardly one's hear whether respondent, a brokerage firm, had absolute liability nether the Securities Exchange Act of 1934, 15 U.S.C.S. § 78p(b), to disgorge all profits made on dealings inward stock issued past times a corporation inward which petitioner stockholder owned shares.

PROCEDURAL HISTORY

• The judgment finding that respondent brokerage together with its fellow member were non liable for all profits realized past times brokerage through dealings inward the stock of petitioner shareholder's corporation nether the Securities Exchange Act of 1934, 15 U.S.C.S. 78p(b), was affirmed, where show showed profits were made independently of whatever within information. 
• Petitioner shareholder claimed respondents made short-swing profits from transactions inward securities of petitioner's corporation. 
• The case courtroom works life respondent brokerage made profits, simply non equally a number of insider data obtained from respondent member, who sat on the corporate board. 
• The case courtroom works life entirely respondent manager liable for his part of transaction profits. Both parties appealed. 
• The appellate courtroom affirmed. 
• Petitioner appealed. 

DISCUSSION

• The Court works life respondent brokerage realized profits independently of insider data together with that it was non absolutely liable for all profits made on the stock because the brokerage did non serve equally a manager nether the statute. 
• Absolute liability was non imposed upon respondent manager where the statute imposed liability entirely for the net the manager himself realized.

CONCLUSION
The Court affirmed the appellate court's judgment finding respondents were non dependent area to absolute liability for profits realized from short-swing transactions inward petitioner's corporation where the brokerage's profits were made independently of insider information. No liability could live on imposed against the brokerage where it was non a corporate director. Respondent manager could live on held liable entirely for profits he personally realized.

Recommended Supplements for Corporations together with Business Associations Law

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