Document: 422 U.S. 49 95 S.Ct. 2069. 45 L.Ed.2d 12 Francis A. RONDEAU, Petitioner,v.MOSINEE PAPER CORPORATION. No. 74—415. Argued April 15, 1975. Decided June 17, Syllabus Respondent corporation brought this action against petitioner to enjoin him from voting or pledging his stock in respondent and acquiring additional shares, require divest himself of the that he already owned. claimed failure who had acquired more than 5% respondent's stock, make timely disclosure as required by § 13(d) Securities Exchange Act 1934, added Williams Act, was a scheme defraud its stockholders. Petitioner, filed schedule about three months after statutory filing time, contended violation, which readily conceded, resulted lack familiarity with securities laws, neither nor shareholders been harmed. The District Court granted petitioner's motion for summary judgment, having found no material issues fact regarding willfulness failing basis record disputing claim first considered possibility obtaining control sometime discovered obligation. It concluded suffered congnizable harm late not an appropriate case grant injunctive relief. Appeals reversed, concluding harmed delayed efforts respond potential obtain company but that, any event, show irreparable prerequisite permanent relief, since securities' issuer, best position assure 13(d)' requirements were being fully complied with. Held: A showing harm, accordance traditional principles equity, is necessary before private litigant can relief based upon Act. Pp. 57-65. (a) erred 'harm' because technical default, has attempted respondent, now made proper disclosure, given indication will report changes schedule. 58-59. (b) Persons allegedly sold their at unfairly depressed predisclosure prices have adequate remedies damages, those would invested, they thought takeover bid imminent, are threatened injury. 59-60. (c) entirely correct insisting satisfy prerequisites extraordinary equitable establishing conclusions acted good faith promptly when became aware obligation do so support exercise court's sound judicial discretion deny application injunction, historically 'designed deter, punish.' Hecht Co. v. Bowles, 321 321, 329, 64 587, 592, 88 L.Ed. 754. 60-62. (d) relieved burden simply it asserting so-called implied right under 13(d). 62-65. 7 Cir., 500 F.2d 1011, reversed remanded. David E. Beckwith, Milwaukee, Wis., petitioner. L. C. Hammond, Jr., respondent. Mr. Chief Justice BURGER delivered opinion Court. 1 We certiorari determine whether suit 48 Stat. 894, 2 82 454, amended, 84 1497, 15 U.S.C. 78m(d). 419 1067, 653, 42 663 (1974). held not. 1011 (CA7 1974). reverse. * Mosinee Paper Corp. Wisconsin engaged manufacture sale paper, paper products, plastics. Its principal place business located Mosinee, only class equity security common registered 78l. At all times relevant litigation there slightly 800,000 shares such outstanding. 3 In 1971 Rondeau, businessman, began making large purchases over-the-counter market. Some own name; others name businesses foundation known be controlled him. By May 1971, 40,413 constituted He therefore comply provisions Act,1 Schedule 13D Commission within 10 days. That form disclosed, among other things, number beneficially owned petitioner, source funds used purchase them, purpose purchases. 4 Petitioner did file continued substantial blocks stock. July 30, 60,000 shares. On date chairman board directors informed letter activity 'given rise numerous remors' 'seems created some problems Federal Laws . ..' Upon receiving immediately stopped placing orders consulted attorney2. August 25, which, addition disclosures, described 'Purpose Transaction' follows: 5 'Francis Rondeau determined during early part Issuer (respondent) undervalued market represented investment vehicle future income appreciation. associates presently propose seek acquire order effective Issuer, investments originally necessarily objective mind. Consideration currently public cash tender offer price reflect current quoted premium added.' 6 also stated event consider management 'in effort provide Board Directors representative shareholders, particularly outside present One month later amended accurately allocation between companies. 27 sent informing them disclosures 13D.3 'tardy filing' 'withheld information you (the shareholders) entitled two months, violation federal law.' addition, while agreeing 'recent reflected real value your stock,' could 'see little Rondeau's background qualify meaning ful guidance Company highly competitive industry.' 8 Six days initiated United States Western Wisconsin. complaint named companies, banks financed defendants alleged laws. further 'sold without disclose lacked decision sell hold,' 'was unable communicate stockholders, take actions interest required.' prayed injunction prohibiting codefendants requiring themselves owned, damages. preliminary withdrawn. 9 After pretrial proceedings moved judgment. conceded violated due laws agreed. exist 13D, on 1971,4 time date. 'did engage intentional covert, conspiratorial conduct Schedule.'5 Similarly, although accepting contention anxiety result activities exacerbated intentions until similar 'could expected accompany change management,' 'a predictable concequence shareholder democracy.' fell far short revealed record; disclosed entitled, proceeded offer. Moreover, view even if cases bad absence damage inappropriate occasion fashion Thus, committed entered judgment it.6 11 one judge dissenting. majority 'giving effect' Court's findings circumstances Act,7 showed response to' company. 'need issuer speedy forceful remedial necessary.' F.2d, 1016—1017. remanded instructions violations purchased period five years. 'such decree neutralize (petitioner's) benefit wrongdoing.' Id., 1017. resolve apparent conflict Courts importance question presented disagree Appeals' conclusion standards apply these circumstances, II 13 As Appeals, here delay narrow issue us supports remedy whose courts always inadequacy legal remedies.' Beacon Theatres, Inc. Westover, 359 500, 506—507, 79 948, 954, 988 (1959). 14 sufficient sterilization need long detain us. insure confronted qualifications offering party.8 target well Commission, Congress intended give incumbent opportunity express explain position. expressly disclaimed intention weapon discourage bids prevent accumulations create attempts. Indeed, Act's draftsmen commented 'extreme care' taken 'to avoid tipping balance regulation either favor person bid.' S.Rep. 550, 90th Cong., 1st Sess., (1967); H.R.Rep. 1711, 2d (1968). U.S.Code Cong. & Admin.News 1968, p. 2811. See Electronic Specialty International Controls Corp., 409 937, 947 (CA2 1969). matter none evils directed occurred case. device. suggestion fail requirement reporting contained therein.9 78m(d)(2); 17 CFR 240.13d—2 likelihood disadvantaged should offer, adequately contest develop. usual 'that exists cognizable danger recurrent violation,' here. W. T. Grant Co., 345 629, 633, 73 898, 97 1303 (1953). Vicksburg Waterworks Vicksburg, 185 65, 82, 22 585, 591, 46 808 (1902). 16 Nor we impressed argument protect interests invested imminent. Brief 13, 20—21. observed, object solve dilemma desiring clear type identified redressable provisions. persons way thus negating relief.10 Youngstown Sheet Tube Sawyer, 343 579, 595, 72 863, 889, 96 1153 (1952) (Frankfurter, J., concurring). second group whom expresses concern retained benefits imminent remote best. Truly Wanzer, How. 141, 142—143, (1847). turn, therefore, judged according principles, bare justified entry This seem foreclosed 754 (1944). There, administrator Emergency Price Control 1942 redress statute. admitted, declined enter inadvertent defendant immediate steps rectify them. despite 205(a) 56 23, 50 U.S.C.App. 925(a) (1940 ed., Supp. II), provided 'shall granted' observing: 18 'We dealing practice several hundred years history. historic process designed punish. essence jurisdiction power Chancellor mould each necessities particular Flexibility rather rigidity distinguished it. qualities mercy practicality instrument nice adjustment reconciliation needs competing claims. believe major departure tradition proposed lightly implied.' U.S., 329—330, S.Ct., 591—592. (Emphasis added.) 19 reasoning applies fortiori involving 'competing claims,' suggests harm. Judge's attention called obligation11 punish' permit court case.' 592. Douglas aptly pointed out 'grant compliance hardly absolute duty circumstances.' Ibid. (emphasis original). 20 urges, however, 'public interest' must into account considering relies 'is position' purchasers misconceives, think, nature litigation. Although availability standing bring questioned here, cause authorized statute legislative Rather, established J. I. Case Borak, 377 426, 1555, 423 (1964). Of course, hesitated recognize consistent protection investors supplement enforcement Commission. Compare supra, Investor Protection Barbour, 421 412, 1733, 44 263 (1975). However, means follows plaintiff our hold quite contrary true. 21 Deckert Independence Shares 311 282, 61 229, 85 189 (1940), decide 1933 rescind fraudulent sale. answered affirmatively statute's 'enforce liability duty' instructive: 'The enforce implies recovery afforded And utilize procedures normally available exigencies If petitioners' bill states tested customary rules governing suits character, authorizes maintenance 288, 233. 23 words, maintain meant may suffered; dispensing Significantly, passage relied Borak respect 1934. 433—434, 1560—1561. 24 Any remaining uncertainty resolved Mills Electric Auto-Lite 396 375, 90 616, 593 (1970). There complaining proved *s 14(a) 1934 misleading statements proxy solicitation itself essential link accomplishment of' merger. stricter standard frustrate rules, Harlan took pains point out: 25 'Our petitioners proxies approval merger obtained materially nothing entitled. devising retrospective same factors govern illegality fraud. selecting lower "the guides determinations equity," keeping mind rule 'the claims." 386, 622, quoting 591. 26 Considering might ordered, observed set aside concludes, so,' 'damages recoverable extent shown.' 388, 389, 623, 624. plainer holding questions separate latter principles. pursuing generally recognized serve provides Accordingly, directions reinstate 28 Reversed directions. 29 MARSHALL dissents. 30 BRENNAN, DOUGLAS joins, 31 I dissent. Judge Pell, dissenting below, correctly my view, read construe it, authorize 'irrespective motivation, irrespective corporation, detrimental company's timewise needed trigger result.' 1018 prophylactic measure conceived effect congressional notified earliest possible moment shift corporate control.' 1016. establishes actionable secure Today's completely undermines preclude inquiry results violation. part: '(d)(1) who, directly indirectly beneficial ownership pursuant section 78l title, insurance except exemption 78l(g)(2)(G) issued closed-end Investment 1940, owner per centum shall, ten acquisition, send executive office, certified mail, exchange where traded, statement containing following information, regulations prescribe investors— '(A) identity behalf effected; '(B) amount consideration purchases, borrowed otherwise acquiring, holding, trading security, description transaction names parties thereto, loan ordinary course bank, defined 78c(a) (6) requests, bank shall public; '(C) prospective securities, plans proposals liquidate assets merge persons, structure; '(D) concerning acquire, indirectly, (i) person, (ii) associate giving address associate; '(E) contracts, arrangements, understandings issure, including limited transfer joint ventures, option puts calls, guaranties loans, loss profits, division losses withholding proxies, naming into, details thereof.' 78m(d)(1). requires every regardless structure. §§ 240.13d—1, 240.13d—101 outstanding filled placed new simultaneously press release information. Almost jumped $19—$21 share. few dropped back prevailing $12.50—$14 share, remained. prior December 10, 1970, person's holdings exceeded 10% corporation's see Pub.L. 91—567, credited testimony believed still familiar shortly letter. unaware considerable 'street talk' brokers, bankers, businessmen monitoring dismissed claims Review rulings sought agreed adequate. Senate Report describes facing 'He many alternatives. hope purchased. less perhaps taken. instances, remain company, helped install knowing shareholder, another alternative, wait better develops, tenders late, runs risk Without knowledge bidder what do, cannot reach decision.' S.Rep.No.550, (1967). discouraged useful providing check entrenched inefficient management.' 3. Because involves requirements, does enjoining exercising rights, launching bid, pending requirements. advised certification sought. intimate views merits case, sanction brief argues 'genuine knowledge, motives, purposes rapid acquisition very least, trial issues. raised petition opposition subject cross-petition. alter like effectively put end litigation, alternative ground affirming manner. 381, 620, n. (1970); Morley Constr. Maryland Cas. 300 185, 191—192, 57 325, 327, 81 (1937). Cf. Wiener States, 357 349, 351, 78 1275, 1277, 1377 (1958).

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