10b 10b-5

10b 10b-5 - 10b5 Basic inc v levinson Basic was publicly...

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10b5 Basic inc v levinson Basic was publicly traded co that made chemicals for the steel industry. In sept 1976 Combustion Engineering met w/ Basic officers discussing merger. Basic made 3 public statements denying that it was engaged in merger negotiations. Dec 18 1978 basic asked NYSE to suspend trading its shares and said it had been approached by another co…next day board endorsed combustions offer of 46 per common stock Plaintiffs are former basic shareholders who sold stock after the 1977 statement denying merger negotiations. They said there were 3 false or misleading public statements and were in violation of 10b-5 District Court: Certified respondents class DC granted summary judgment for the defendants. As a matter of law any misstatements were immaterial. Negotiations were not destined w/ reasonable certainty to become a merger agreement in principle 6 th circ: Reversed DC summary judgment company may not voluntarily release statement that is so incomplete as to mislead. Fraud on the market theory = rebuttable presumption that respondents relied on petitioner’s material misrepresentations noting that w/o the presumption it would be impractical to certify a class under fed rules. Supreme Ct.
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10b 10b-5 - 10b5 Basic inc v levinson Basic was publicly...

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