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19 Cards in this Set
- Front
- Back
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What are the two views in what a shareholder must show in demanding corporate information?
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1. commonlaw
2. Statutory |
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What must a plaintiff show to get records pursuant to the commonlaw method?
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1. Proper purpose- that it is related to plaintiffs interest as a shareholder.
2. For each item wanted, the S/H must show that the item is essential to the proper purpose. 3.There needs to exist a credible basis to find probable corporate wrongdoing satisfied through documents, logic, testimony or otherwise. |
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In regards to the commonlaw and plaintiffs demand for information, will a mere curiosity on behalf of the S/H or a desire for a fishing expedition suffice to satisify a credible basis for the records?
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no
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What is the Statutory method regarding S/H demand?
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1. Usually has a duration or amount of ownership provisions.
2. Plaintiff still has the burden for all other records except stockholder lists. 3. By statute, it is now a burden of the corporation to prove that the demand for a stockholder list is for an improper purpose. Note: the court can impose conditions on release of documents. |
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What is a cede list?
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Cede & Co is one of the largest of the four regional depositories. A cede list is a list of owners of stock behind the depositories (usually brokerage firms). The cede list just lists the brokerage companies.
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What is a NOBO list?
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Non-objecting beneficial owners has the names of the acutal people that vote (the real owners.). It's the actual list of the shareholders who say "you can tell the people who i am"
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What is a proxy?
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written authorization given by a shareholder to someone else to represent him and vote his shares at a shareholders meeting.
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What is a proxy solicitation?
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The process by which shareholders are asked to give their proxies
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What is a proxy statement?
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A written statement sent to shareholders as a means of proxy solicitation.
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How do we know if a company is subject to sec law?
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They are only those corporations that are registered under SEC Section 12 which have:
1. There is a connection with interstate commerce. 2. 500 shareholders or more, and more than $10 million in assetw or 3. Registered on a national stock exchange. |
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What is the process to begin an analysis for security fraud?
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look at all in the following order:
1. 10b5 2. 16b 3. c/l |
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For a security fraud case, what is a proper defendant?
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A proper defendant is an insider, someone who has access to confidential corporate information because of position, or relationship to the corporation.
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what is the test for a proper plaintiff in a securities fraud case?
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Normally a purchaser or seller.
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Pursuant to the security fraud and the commonlaw, is there liability regarding exchanges of stock?
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no
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what are the prima facie elements for a 10b violation?
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1. Misrepsentation/ommission
2. Materiality 3. Fact 4. Scienter 5. Causation 6. reliance 7. harm |
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How do we discuss the materiality element for a contingent event in regards to security fraud pursuant to rule 10b?
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we weight the probability of sucess against gravity.
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What is the three levels of scienter?
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Intentionality
Recklessness Negligent |
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What is an example of a rebuttable action in regards to reliance under a 10b action?
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the person whould have went ahead with the transaction regardless if he knew of the action or not.
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What are the two elements of causation under a security fraud action pursuant to 10b5?
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Did misrepresentation/omission cause the transaction and as such caused the harm suffered?
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