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19 Cards in this Set

  • Front
  • Back
What are the two views in what a shareholder must show in demanding corporate information?
1. commonlaw
2. Statutory
What must a plaintiff show to get records pursuant to the commonlaw method?
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.
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?
What is the Statutory method regarding S/H demand?
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.
What is a cede list?
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.
What is a NOBO list?
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"
What is a proxy?
written authorization given by a shareholder to someone else to represent him and vote his shares at a shareholders meeting.
What is a proxy solicitation?
The process by which shareholders are asked to give their proxies
What is a proxy statement?
A written statement sent to shareholders as a means of proxy solicitation.
How do we know if a company is subject to sec law?
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.
What is the process to begin an analysis for security fraud?
look at all in the following order:
1. 10b5
2. 16b
3. c/l
For a security fraud case, what is a proper defendant?
A proper defendant is an insider, someone who has access to confidential corporate information because of position, or relationship to the corporation.
what is the test for a proper plaintiff in a securities fraud case?
Normally a purchaser or seller.
Pursuant to the security fraud and the commonlaw, is there liability regarding exchanges of stock?
what are the prima facie elements for a 10b violation?
1. Misrepsentation/ommission
2. Materiality
3. Fact
4. Scienter
5. Causation
6. reliance
7. harm
How do we discuss the materiality element for a contingent event in regards to security fraud pursuant to rule 10b?
we weight the probability of sucess against gravity.
What is the three levels of scienter?
What is an example of a rebuttable action in regards to reliance under a 10b action?
the person whould have went ahead with the transaction regardless if he knew of the action or not.
What are the two elements of causation under a security fraud action pursuant to 10b5?
Did misrepresentation/omission cause the transaction and as such caused the harm suffered?