Opinion ID: 503142
Heading Depth: 2
Heading Rank: 2

Heading: Uniquely Positioned--Duty

Text: 30 Kane questions the Commission's finding that he was uniquely positioned to ask relevant questions, acquire material information, or disclose his findings. Under Kane's theory, the sale of the 150,000 shares to Becker was fully accomplished and completed at the time of the phone call between Hanson and Volk. Kane argues that the two agreed on a net price of $12.00 a share, and the number of shares to be sold, i.e., 150,000 shares. Thus, according to Kane, he was a mere order taker. 2 Any information he may have obtained and revealed, he says, would have been to no avail. Moreover, Kane disclaims any involvement whatsoever in Becker's sale of the 150,000 shares to the general public. As such, Kane argues that he was in no way a participant for purposes of section 5 liability. 31 This circuit has determined that section 5 liability extends to those persons who are uniquely positioned to ask relevant questions, acquire material information, or disclose their findings. Wasson v. SEC, 558 F.2d 879, 886 (8th Cir.1977). Such liability encourages those parties who can most efficiently obtain information and disclose it, to do so, while not penalizing mere intermediaries who would not normally be expected to inquire or disclose. See id. 32 The record supports the Commission's findings that Kane was the type of person to whom liability extends. Kane's involvement at the initial stages was extensive. It was Kane who set up the trading account, who knew that Hanson would control the account, and who knew that the Toronto Dominion Bank was not the owner of the shares. It was Kane, exclusively, to whom Hanson would relay the size and price parameters for each separate transaction. Kane acted as a conduit between Emmett, who arranged sales of the shares to the general public, and Hanson. Finally, it was Kane's responsibility as a broker, both by Becker policy and industry custom, to properly inquire as to the source of the 150,000 shares. An entire infrastructure and bureaucracy existed at Becker to efficiently process and disseminate any information that Kane might disclose. 33