Court Opinion

ID: 9426691
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:18:40.382645+00
Date Added: 2024-06-11T17:23:02.423315
License: Public Domain

Mr. Justice Stevens,
with whom Mr. Justice Brennan joins, dissenting.
The Williams Act was passed for the protection of investors. The threshold question in this case is whether the *54holder of a large block of stock who is seeking to retain or to acquire control of a corporation is one of the investors the statute was intended to protect.
The critical issue can be framed by concentrating on the exchange offers in July 1969. The conclusion that Bangor Punta’s offer violated § 14 (e) is established by prior proceedings and is not now open for review.1 When that violation occurred, Chris-Craft owned 556,206 shares of Piper stock and was attempting to acquire sufficient additional shares to constitute control. As a result of Bangor Punta’s violations, Chris-Craft claims that it was injured in two ways: the value of its investment in Piper stock was impaired,2 and it lost the opportunity to purchase enough additional shares to control Piper.3 The Court holds that Chris-Craft has no “standing” to recover damages for either injury no matter *55how flagrant Bangor Punta’s violation may have been, no matter how direct the causal connection between that violation and Chris-Craft’s injury, and no matter how serious the injury. I disagree with this holding.
No one seriously questions the premise that Congress implicitly created a private right of action when it enacted § 14 (e) in 1968.4 Also beyond serious question is the proposition that the members of the class which Congress was especially interested in protecting may invoke that private remedy and, further, that the shareholders of a target corporation are members of that class. The Court nevertheless holds that Chris-Craft may not recover because the protected class does not include tender offerors even though they may also be shareholders; and, at least implicitly, that to the extent Chris-Craft was injured in its status as a shareholder, its injury is not of a kind that the statute was intended to avoid. I am persuaded that both holdings are erroneous. I first consider Chris-Craft’s status as a shareholder and then its rights as a tender offeror. Finally, I explain why my analysis is consistent with Cort v. Ash, 422 U. S. 66.
*56I
Shareholders of a target corporation may be injured by a fraudulent tender offer in two quite different ways. They may exchange their shares for an inadequate consideration in reliance on the misrepresentation. Or they may retain their shares and be harmed by the fact that other shareholders were induced to surrender control to unworthy newcomers. The legislative history of § 14 (e) persuades me that Congress intended to protect the shareholders from both of these potential harms.5 Since Chris-Craft claims to *57have suffered the latter type of harm,6 it has asserted a cause of action created by the statute.
Section 14 (e) was patterned after § 14 (a), which regulates *58proxy contests.7 It is clear that a shareholder may recover in a suit under § 14 (a) even though he was not himself deceived by the misrepresentation.8 I do not understand why § 14 (e) should receive any narrower construction.9 At the very *59least, the Court should allow all shareholders injured by a violation of § 14 (e) to assert a damages claim against the wrongdoer. Neither the extraordinary size of Chris-Craft’s investment in Piper stock, nor the fact that the stock had been owned for only a few months, should deprive Chris-Craft of the right to assert a remedy available to the other members of the shareholder class which § 14 (e) was plainly designed to protect.
II
Even if we disregard Chris-Craft’s stock ownership in Piper and focus only on its status as a tender offeror, it remains clear to me that its legal rights were invaded by the defendants’ violation of § 14 (e). This conclusion is compelled by (a) a fair evaluation of the legislative purpose in the light of the rationale of J. I. Case Co. v. Borak, 377 U. S. 426; and (b) respect for the opinions of the Securities and Exchange Commission and the numerous federal judges who have recognized that § 14 (e) is little more than a restatement of Rule 10b-5 unless it has broadened the class of potential litigants who may challenge defective cash tender offers to include rival contestants for control as well as shareholders.
A
In Borak a unanimous Court held that the 1934 Act had implicitly authorized a shareholder to bring an action for rescission or damages for a violation of § 14 (a). Such a remedy was regarded as essential for the protection of investors10 because practical considerations made it impos*60sible for the SEC to enforce the proxy statement requirements completely and effectively.11 This practical concern applies with even greater force to tender offers which are processed on a highly expedited schedule.12
*61In both proxy and tender offer contests, the remedy which will most effectively deter violations of the statute is unquestionably the private damages action.13 Under these circumstances, as the Court stressed in Borak, supra, “it is the duty of the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose.” 377 U. S., at 433.
If a private remedy must be implied to ensure full compliance with the statute, the remedy must be available to the litigants who are most vitally interested in effective enforcement. This is the essence of the Borak holding which was given emphasis by its quotation from Deckert v. Independence Corp., 311 U. S. 282, 288:
“ ‘The power to enforce implies the power to make effective the right of recovery afforded by the Act. And the power to make the right of recovery effective implies the power to utilize any of the procedures or actions normally available to the litigant according to the *62exigencies of the particular case.' ” 377 U. S., at 433-434 (emphasis in original).
The potential litigants who have the most to gain from enforcement of the statute—and the most to lose if its provisions can be ignored with impunity—are plainly the rival contestants. Surely the contestants are in a much better position—and have a much greater incentive—than a mere shareholder to detect and to challenge conduct prohibited by the Williams Act. Once one recognizes that Congress intended to rely heavily on private litigation as a method of implementing the statute, it seems equally clear that Congress would not exclude the persons most interested in effective enforcement from the class authorized to enforce the new law. Nor does it seem logical to assume that such authority would only reach actions brought for the benefit of the shareholders. It is fundamental in our adversary system that the selfish interest of the litigant provides the best guarantee that a claim will be effectively asserted.14 I see no reason to deny incumbent management the right to recover for its own losses as well as for such injuries as the shareholders may have suffered. After all, those insiders are often the specific target of the conduct that the statute was enacted to regulate.15
*63If management is included within the protected class, an outside tender offeror has an equally strong argument for inclusion. For the legislative history also indicates that Congress was concerned about misconduct by insiders as well as outsiders. And just as management will most effectively challenge violations by the invader, so it is equally clear that a company committed to an attempt to acquire control of a target company will be the most zealous guardian of the shareholders’ interests in having management comply with the law. I find ample evidence of congressional interest in fair competition between outsiders and insiders in making and opposing tender offers to shareholders of the target company. That evidence persuades me that both contenders are included within the class of persons protected by § 14 (e).16
*64B
The lower courts, along with the SEC, have consistently taken a broad view of standing under § 14 (e).
In the appeal on liability in this case, the SEC’s amicus memorandum in the Second Circuit argued that “if a rival company in a contest for corporate control has no standing to sue for violations of the securities laws, enforcement of recent Congressional legislation to assure fairness in such struggles will be hampered ...." Memorandum of SEC as Amicus Curiae in No. 72-1064 (CA2), p. 12. In its brief before this Court, the SEC continues to insist that “[e]ven more necessary [than in Borak] are such private rights of action to supplement Commission actions to effectuate the Congressional purposes in enacting the Williams Act,” Brief for SEC as Amicus Curiae 12. It devotes a full 55 pages of its brief to arguing that providing a private remedy in this case is necessary to insure enforcement of the Act and is consistent with the congressional intent. The SEC’s expertise in the securities field, and its intimate involvement in the passage of the Act, entitle its views to respect.
The Courts of Appeals have also taken an expansive view of standing under § 14 (e). Shortly after § 14 (e) was passed, for example, Judge Friendly pointed out that the section’s only possible addition to existing case law was its possible impact on standing, and indicated that both non-tendering shareholders and the corporation have standing, Electronic Specialty Co. v. International Controls Corp., 409 F. 2d 937, 940-941, 946 (CA2 1969). Accord, Smallwood v. Pearl Brewing Co., 489 F. 2d 579, 596 (CA5 1974). In another Second Circuit case, the court commented that § 14 (e) “should serve to resolve any doubts about standing in the tender offer cases, even where an offeror is not . . . in the position of a forced seller.” Crane Co. v. Westinghouse Air Brake Co., 419 F. 2d 787, 798-799 (1969). In the present case, while the Court of Appeals judges disagreed sharply on *65several issues, there was agreement on standing. Judge Mansfield, in his separate opinion, explained:
“The federal securities laws are silent on the subject of a private party’s standing to sue. Indeed, neither § 14 (e) nor § 10 (b) or Rule 10b-5 state that purchasers, sellers, or exchangers of securities have the right to sue. However, their implied standing to sue has long since been judicially established . . . . I would recognize CCI’s standing solely on the ground that vigorous enforcement of the anti-fraud provisions through private litigation . . . calls for similar implication of a private right of action in favor of a defeated contestant against the successful bidder for control for damages caused by the latter’s violation of that section, . . . especially in view of our willingness to permit the target corporation to seek relief against the offeror under § 14 (e).” 480 F. 2d 341, 396 (CA2 1973). (Citations omitted.)
The First Circuit, relying heavily on these decisions, has also extended standing to obtain damages to tender offerors, H. K. Porter Co. v. Nicholson File Co., 482 F. 2d 421, 424—425 (1973), and the Fifth Circuit has cited them with apparent approval. Smallwood v. Pearl Brewing Co., supra, at 596, and n. 20.17
*66III
Petitioners view Cort v. Ash, 422 U. S. 66, as foreclosing standing in this case because tender offerors do not belong to the “especial class” Congress intended to benefit. I am convinced, however, that the controlling authority is not Cort, but J. I. Case Co. v. Borak, supra. In Borak, the Court held that a derivative suit on behalf of the corporation could be brought under § 14 (a), see 377 U. S., at 431, although it seems clear that the primary beneficiaries of that section were individual stockholders rather than corporations. Thus, Borak itself does not meet the majority’s “especial class” test.18 But Cort carefully distinguished Borak on grounds that apply equally to this case. In this case, as in Borak, there is “at least a statutory basis for inferring that a civil cause of action of some sort lay in favor of someone,” Cort, 422 U. S., at 79; see id., at 79 n. 11; there is a “pervasive legislative scheme governing the relationship between the plaintiff class and the defendant class in a particular regard,” id., at 82; the private remedy is necessary to effectuate the congressional goal, id., at 84; and that goal will accordingly be hindered if the plaintiff is relegated to an inadequate state remedy, id., at 85. Thus, in the kind of situation presented by *67Borak and this case, Cort does not require that the plaintiff belong to the “especial class” as one of four relevant factors to be considered; nowhere does it say that this factor is essential. And in discussing this factor, the Court suggested the existence of a “pervasive legislative scheme” as an alternative to an “articulated federal right in the plaintiff,” id., at 82. I conclude that Cort does not bar Chris-Craft’s action, and that Borak remains a viable precedent. As shown in Part II-A, supra, Borak compels a holding that Chris-Craft has standing.
The “especial class” argument, besides being based on a misreading of Cort and Borak, is also based on the mistaken belief that congressional desire to protect shareholders is in some way inconsistent with providing tender offerors with a right to damages.
It is true that Congress was deeply concerned about the individual stockholder faced with a tender offer. Congress did not, however, view this shareholder’s interest as being distinct from the interests of others affected by his decision. As noted in the discussion of Chris-Craft’s standing as a shareholder, Congress also intended to protect those who would remain shareholders after the successful tender offer, supra, at 56-57, n. 5; see also supra, at 62-63, n. 15. Like these shareholders, the participants in the tender contest were seen as having an interest in the integrity of the process. Senator Williams, in explaining the purposes of the bill, stated:
“I have taken extreme care with this legislation to balance the scales equally to protect the legitimate interests of the corporation, management, and shareholders without unduly impeding cash takeover bids. Every effort has been made to avoid tipping the balance of regulatory burden in favor of management or in favor of the offeror. The purpose of this bill is to require full and fair disclosure for the benefit of stockholders while at the same time providing the offeror and management *68equal opportunity to fairly present their case.[19] Experience . . . has amply demonstrated that the disclosure requirements of the Federal securities acts are an aid to legitimate business transactions, not a hindrance.” 113 Cong. Rec. 854-855 (1967) (emphasis added).
“[This bill will put all on] an equal footing with respect to the availability of significant facts about a tender offer .... All will be able to deal in the securities markets knowing that all of the pertinent facts are available.” Id., at 856.
Indeed, protection of tender offerors is not only consistent with protection of shareholders. It is also indispensable to protecting shareholders. Individual shareholders often lack the capacity to litigate these cases effectively. Few indeed could afford to pursue the course Chris-Craft has taken of hiring counsel with experience in complex litigation of this kind to litigate through a preliminary injunction, discovery, trial on liability, another trial on damages, three appeals to the Second Circuit, including an en banc, and three petitions to this Court. Thus, the most realistic deterrent to fraud on shareholders is a damages suit brought by the opposition in the tender contest. Moreover, disallowing such suits creates an incentive to violate the Act in retaliation for violations by the other side. When no effective judicial remedy is available, self-help is more attractive. Finally a damages remedy for the tender offeror is necessary for the protection of one particular class of shareholders: those shareholders of target corporations who accept an exchange offer and thereby become shareholders of the tender offeror. In the instant case, 112,089 Piper shares were tendered to Chris-Craft as part of an exchange offer effective July 24. The tendering shareholders took the risk that Chris-Craft might lose in a fair tender con*69test. But they did not assume the risk that Bangor Punta would illegally deprive Chris-Craft of its opportunity to gain control. These shareholders are certainly within the especial class § 14 (e) was intended to protect. Only by making Chris-Craft whole can the expectations of these shareholders be vindicated.20
Petitioners’ answer to all this is that an award of damages to Chris-Craft would harm the former Piper shareholders who exchanged their stock for Bangor Punta stock. This answer is unsatisfactory for three reasons. First, I am unpersuaded that the federal courts are incapable of structuring the remedy to avoid this problem. See H. K. Porter Co. v. Nicholson File Co., 482 F. 2d 421, 425 (CA1 1973). Second, in many cases the problem will not arise, either because the size of the judgment will be small in relation to the defendants’ assets, or because most or all of the tendering shareholders will have sold their stock by the time of the judgment. Third, the argument provides no basis for distinguishing between private plaintiffs. Any monetary recovery against Bangor Punta by any plaintiff potentially decreases the value of Bangor Punta’s stock.21
*70In sum, in my judgment the disposition of the standing issue by the Court of Appeals for the Second Circuit was consistent with this Court’s prior decisions as well as the unanimous view of other Circuits. The fact that error may have been committed in this litigation in the consideration of the liability and damages issues—or might be committed in other cases—should not be permitted to color the analysis of the threshold standing issue. On that issue—unless the basic policy of construing securities legislation liberally to protect investors, which motivated this Court’s decisions in this area of the law for decades, is to be repudiated—a fair evaluation of the statute requires affirmance.
Since the Court does not address the other questions presented by the certiorari petitions, neither shall I. I must, however, register my additional dissent from the Court’s action in volunteering to decide—and in deciding incorrectly—a question not raised by the parties. The Court’s reversal of the injunction entered by the District Court pursuant to the direction of the Court of Appeals is, as far as I can determine, totally unprecedented.
I frankly do not understand the reasoning which leads the Court to conclude that the injunction was “premised” upon the damages award. Ante, at 47. The injunction was an independent remedy premised on the violations of law found by the lower courts. Setting aside the damages recovery provides an additional reason for permitting the injunction to remain in effect; surely that action does not logically support the conclusion that there should be no remedy whatsoever for violations which the Court assumes, arguendo, were properly proved.
My reading of the relevant portions of the record do not persuade me that Chris-Craft made a binding election to waive any right to equitable relief,22 particularly since it *71must be kept in mind that all parties had assumed that a damages remedy was available.23 If there has been any relevant waiver, it is by the petitioners who did not challenge *72the injunction in this Court.24 In reaching out to decide this unargued question, the Court takes a liberal view of the “plain error” doctrine which I consider unacceptable.
Accordingly, without explaining my views about the issues not decided by the Court,25 I respectfully dissent from its judgment.

 This is the third chapter in the history of this monumental litigation. There have been three trials, three appeals, and three groups of certiorari petitions. Only the questions presented by the certiorari petitions granted on April 5, 1976, 425 U. S. 910, are before us. For the purpose of analyzing the standing issue, we must accept the premise that the petitioning defendants are guilty of violating § 14 (e) and Rule 10b-6.

 In ¶ 64 of its second amended complaint, Chris-Craft alleged: “The foregoing acts and courses of conduct by the defendants . . . sharply decreased the value of Chris-Craft’s holdings in Piper . . . .” App. F-26. In its opinion on liability, the Court of Appeals noted: “The specific injury sustained [by Chris-Craft] was a reduction in the value of [its] Piper holdings . . . ." Id., at A-60.

 Chris-Craft also alleged that “but for the unlawful acts of the defendants described herein, Chris-Craft would have achieved control of Piper,” or at least would have paid less for stock it did acquire. Second amended complaint ¶ 65, App. F-26. In view of these separate allegations it is a little difficult to understand the suggestion, ante, at 35-37, that Chris-Craft is not suing for injuries sustained in its status as a Piper shareholder. The fact that the Court of Appeals correctly regarded Chris-Craft’s status as a tender offeror as an adequate basis for relief does not imply rejection of its claim as a shareholder, particularly since the damages awarded by the Court of Appeals included compensation for the impaired value of its Piper holdings.

 Although originally one might have argued that the private remedies created by the Securities Acts are limited to those expressly described in the legislation itself, history has foreclosed any such argument today. The statutes originally enacted in 1933 and 1934 have been amended so often with full congressional awareness of the judicial interpretation of Rule 10b-5 as implicitly creating a private remedy that we must now assume that Congress intended to create rights for the specific beneficiaries of the legislation as well as duties to be policed by the SEC. This case therefore does not present the same kind of issue discussed in Cort v. Ash, 422 U. S. 66, namely, whether the statute created an implied private remedy. Rather, the question presented here is who may invoke that remedy. Nevertheless, it is noteworthy that none of the factors identified in the Cort opinion militates against implying a private cause of action in favor of Chris-Craft. Indeed, it is beyond dispute that here, as in J. I. Case Co. v. Borak, 377 U. S. 426, 431-433, the asserted private remedy would unquestionably aid the “primary goal” of the statute. See Cort, supra, at 85.

 In its discussion of the need for the legislation, the House Committee Report stated:
“The public shareholder must, therefore, with severely limited information, decide what course of action he should take. He has many alternatives. He can tender all of his shares immediately and hope they are all purchased. However, if the offer is for less than all the outstanding shares, perhaps only a part of them will be taken. In these instances, he will remain a shareholder in the company, under a new management which he has helped to install without knowing whether it will be good or bad for the company.
“The shareholder, as another alternative, may wait to see if a better offer develops, but if he tenders late, he runs the risk that none of his shares will be taken. He may also sell his shares in the market or hold them and hope for the best. Without knowledge of who the bidder is and what he plans to do, the shareholder cannot reach an informed decision. He is forced to take a chance. For no matter what he does, he does it without adequate information to enable him to decide rationally what is the best possible course of action. This is precisely the kind of dilemma which our Federal securities laws are designed to prevent.
“The competence and integrity of a company's management, and of the persons who seek management positions, are of vital importance to stockholders. Secrecy in this area is inconsistent with the expectations of the people who invest in the securities of publicly held corporations and impairs public confidence in securities as a medium of investment. H. R. Rep. No. 1711, 90th Cong., 2d Sess., 2-3 (1968) (hereinafter House Report).
“It was urged during the hearings that takeover bids should not be discouraged because they serve a useful purpose in providing a check *57on entrenched but inefficient management. It was also recognized that these bids are made for many other reasons, and do not always reflect a desire to improve the management of the company. The bill avoids tipping the balance of regulation either in favor of management or in favor of the person making the takeover bid. It is designed to require full and fair disclosure for the benefit of investors while at the same time providing the offeror and management equal opportunity to fairly present their case.” Id., at 4.

 Chris-Craft’s recovery included damages for the impaired value of its holdings, measured by the loss of the control premium its stock would have commanded but for the defendants’ violations, and by the additional loss of value resulting from its position as a locked-in holder of an exceptionally large block. These elements of damages relate only to the stock actually owned by Chris-Craft and therefore are distinguishable from damages suffered in its capacity as a tender offeror which are measurable by the loss of the opportunity to exercise control. It is not correct to characterize these items of damages as related only to Chris-Craft’s status as a tender offeror. See ante, at 36-37. On the contrary, any owner of an equally large block would lose the control premium that block could previously have commanded on the market, and would suffer a further loss if the company had passed into hostile hands. For instance, members of the Piper family could have claimed damages of this kind if they had remained shareholders in Piper and Chris-Craft had illegally gained control.
The Court suggests that Chris-Craft should be denied standing because the damages it seeks are “actually related under these circumstances to Chris-Craft’s status as a contestant for control . . . .” Ante, at 36 (emphasis in original). The italicized phrase may be intended to imply that a shareholder who was not also a tender offeror could recover these items of damages. If so, the Court fails to explain why a tender offeror should be denied like relief. The congressional goal of neutrality with respect to tender offers would be impaired if persons holding large control blocks were granted greater rights than tender offerors who challenge their control.
On the other hand, the Court may mean that a shareholder’s damages recovery may not include elements attributable to the size of its holdings. (The remainder of this paragraph of the opinion lends itself to this interpretation by distinguishing between “typical,” or “ordinary” share*58holders, and owners of large blocks.) This restriction on the damages recovery would be unsound. There is no reason to think that Congress would have intended anything less than a “make whole” remedy for shareholders. If I am correct that the purpose of the Williams Act was to protect the interests of shareholders, and others, in the integrity of the process of determining corporate control, see n. 5, supra, and infra, at 67-68, this kind of damages recovery could provide some measure of the value to the large shareholder of these interests.

 Both the Senate and the House Committee Reports refer to the cash tender offer as similar to a proxy contest.

 In Mills v. Electric Auto-Lite Co., 396 U. S. 375, minority shareholders brought suit to set aside a merger on the ground that a proxy solicitation had been misleading. The suit was brought before the merger; obviously the plaintiffs were then aware of the misrepresentation, and in fact they voted against the merger, 403 F. 2d 429, 435 (CA7 1968), which was consummated despite their votes. This Court held that the minority shareholders were entitled to some relief, and while not specifying that relief, noted that “[m]onetary relief will, of course, also be a possibility.” 396 U. S., at 388. If the defect in the proxy solicitation related to a term of the merger, an accounting could be ordered so that the shareholders would “receive the value that was represented as coming to them”; otherwise, monetary relief would be available “if the merger resulted in a reduction of the earnings or earnings potential of their holdings.” Id., at 388-389. This holding in Mills was consistent with the earlier statement in J. I. Case Co. v. Borak, 377 U. S. 426:
“The injury which a stockholder suffers from corporate action pursuant to a deceptive proxy solicitation ordinarily flows from the damage done the corporation, rather than from the damage inflicted directly upon the stockholder. The damage suffered results not from the deceit practiced on him alone but rather from the deceit practiced on the stockholders as a group.” Id., at 432.

 The tender offer is just one species of solicitation that either an incumbent or an outside group may use in a contest for control of a corporation. Power to direct the destiny of the corporation may be obtained by acquiring proxies for a majority of the shares, by acquiring the shares themselves, or more typically by a combination of proxies and *59actual purchases. Section 14 broadly prohibits fraudulent solicitations, not merely to protect the individual shareholder from casting a misguided vote or from making an ill-advised sale, but more importantly to protect the corporate entity as a whole from the consequences of a vital decision procured by fraud.

 It is noteworthy that in the Borak opinion the Court consistently used the word “investors” rather than the word “shareholders” to describe the protected class.

 “The injury which a stockholder suffers from corporate action pursuant to a deceptive proxy solicitation ordinarily flows from the damage done the corporation, rather than from the damage inflicted directly upon the stockholder. The damage suffered results not from the deceit practiced on him alone but rather from the deceit practiced on the stockholders as a group. To hold that derivative actions are not within the sweep of the section would therefore be tantamount to a denial of private relief. Private enforcement of the proxy rules provides a necessary supplement to Commission action. As in antitrust treble damage litigation, the possibility of civil damages or injunctive relief serves as a most effective weapon in the enforcement of the proxy requirements. The Commission advises that it examines over 2,000 proxy statements annually and each of them must necessarily be expedited. Time does not permit an independent examination of the facts set out in the proxy material and this results in the Commission’s acceptance of the representations contained therein at their face value, unless contrary to other material on file with it. Indeed, on the allegations of respondent’s complaint, the proxy material failed to disclose alleged unlawful market manipulation of the stock of [the American Tractor Corp.] and this unlawful manipulation would not have been apparent to the Commission until after the merger.
“We, therefore, believe that under the circumstances here it is the duty of the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose.” 377 U. S., at 432-433.

 “As initially introduced, the bill would have required the disclosure statement to be filed with the Securities and Exchange Commission 5 days before the tender offer was made to allow the staff of the Securities and Exchange Commission an opportunity to review the material for compliance with the applicable requirements. At the hearings it was urged that this prior review was not necessary and in some cases might delay the offer when time was of the essence. In view of the authority and responsibility of the Securities and Exchange Commission to take appropriate action in the event that inadequate or misleading information is disseminated to the public to solicit acceptance of a tender offer, the bill as approved by the committee requires only that the statement be on file with the Securities and Exchange Commission at the time the *61tender offer is first made to the public.” S. Rep. No. 550, 90th Cong., 1st Sess., 4 (1967) (hereinafter Senate Report).

 In the passage from Borak set out in n. 11, the Court described the possibility of civil damages or injunctive relief as “a most effective weapon” in the enforcement of the Securities Exchange Act. The efficacy of enforcement of the antitrust laws and the Civil Rights Acts by “private attorneys general” rests on precisely this premise.
For example, we have stated that cases rejecting the in pari delicto defense,
“were premised on a recognition that the purposes of the antitrust laws are best served by insuring that the private action will be an ever-present threat to deter anyone contemplating business behavior in violation of the antitrust laws. The plaintiff who reaps the reward of treble damages may be no less morally reprehensible than the defendant, but the law encourages his suit to further the overriding public policy in favor of competition. A more fastidious regard for the relative moral worth of the parties would only result in seriously undermining the usefulness of the private action as a bulwark of antitrust enforcement.” Perma Mufflers v. International Parts Corp., 392 U. S. 134, 139.

 This is the basis of the standing requirement in its constitutional aspect. See Baker v. Carr, 369 U. S. 186, 204. As one of the draftsmen of the 1934 Act put it, “there is no policeman so effective as the one whose pocketbook is affected by the degree to which he enforces the law.” Stock Exchange Practices, Hearings on S. Res. 84 (72d Cong.) and S. Res. 56 and S. Res. 97 (73d Cong.) before the Senate Committee on Banking and Currency, 73d Cong., 2d Sess., pt. 15, National Securities Exchange Act of 1934, p. 6518 (1934).

 Consider the following testimony by Senator Kuchel, who described himself as a coauthor of the legislation:
“The competence and integrity of management and controlling persons are of vital importance to stockholders. And yet, the prospective purchasers on a cash tender offer need not and often do not reveal their *63intentions, their commitments, or even their identities to the corporate shareholders. Not only is the shareholder prevented from making an informed investment decision, but both he and the corporation may easily become the unknowing victims of the so-called corporate raider.
“Today, there are those individuals in our financial community who seek to reduce our proudest businesses into nothing but corporate shells. They seize control of the corporation with unknown sources, sell or trade away the best assets, and later split up the remains among themselves.
“The tragedy of such collusion is that the corporation can be financially raped without the management or the shareholders having any knowledge of the acquisitions. Using the cash tender offer as a vehicle, the purchases can be made in so-called street names or, even more commonly, by Swiss banks for an undisclosed account number. The corporate raider may thus act under a cloak of secrecy in obtaining the shares needed to put him on the road to a successful capture and liquidation of the company.” Hearings on S. 510 before the Subcommittee on Securities of the Senate Committee on Banking and Currency, 90th Cong., 1st Sess., 42-43 (1967).

 The use of terms such as “corporate raider” and “take-over pirate” in the argument of this case was misleading because they implied that the Williams Act was not intended to be neutral as between rival contestants for control. One thing that is abundantly clear from both the language of the statute and its legislative history is that the Act was not intended to tip the scales in favor of management.

 We have been referred to two cases as restricting standing under § 14(e): Klaus v. Hi-Shear Corp., 528 F. 2d 225, 232 (CA9 1975); Sargent v. Genesco, Inc., 492 F. 2d 750 (CA5 1974). In both cases, however, there was no harmful misrepresentation to the protected shareholders. Hence, as the Sargent court noted, the issue was not “whether these plaintiffs were appropriate plaintiffs to enforce the duties created by [§] 14 (e),” but rather, whether those duties were violated. Id., at 770 n. 28. In Klaus, it was the tender offeror who was misled. 528 F. 2d, at 232.
The commentators have supported the expansive view of standing under § 14 (e). See, e. g., Bromberg, The Securities Law of Tender Offers, 15 N. Y. L. F. 459, 554 (1969); Hamilton, Some Reflections on Cash Tender Offer Legislation, 15 N. Y. L. F.. 269, 291-292 (1969); Note, *66Chris-Craft and Loss of Opportunity to Control: The Lost Opportunity, 43 Ford. L. Rev. 820, 821 (1975); Comment, Remedies for Defrauded Tender Offerors Under Section 14 (e) of the Securities Exchange Act of 1934, 62 Geo. L. J. 1693, 1695-1696 (1974); Note, Cash Tender Offers, 83 Harv. L. Rev. 377, 398-399 (1969); Comment, Tender Offers: The Liberalization of Standing Requirements Under Section 14 (e), 7 U. San Fran. L. Rev. 561 (1973).

 The Court reads Borak as though it merely sustained class relief on behalf of all shareholders. Ante, at 32-33, and n. 21. The Borak opinion itself, however, is explicit in its holding that “a right of action exists as to both derivative and direct causes.” 377 U. S., at 431. Even under the Court’s interpretation of Borak as protecting all shareholders, I do not understand today’s holding that only some Piper shareholders are protected—i. e., “ordinary” shareholders as opposed to holders of large blocks.

 This language is also found in both the House and Senate Reports. House Report 4; Senate Report 3.

 Because the injury to these shareholders “ordinarily flows from the damage done the corporation, rather than from the damage inflicted directly upon the stockholder,” Borak, 377 U. S., at 432, it would be only a slight extension of Borak to allow these shareholders to bring a derivative action on behalf of Chris-Craft. Cf. id., at 432-433. I would also allow Chris-Craft to bring the action.

 Petitioners’ argument would thus bar a suit by a person who had tendered a large number of shares to Bangor Punta, since a recovery on his behalf could injure other former Piper shareholders. It would also bar one of the remaining public shareholders in Piper from suing, either in his own behalf or on behalf of Piper, for Bangor Punta’s illegal acquisition of control. Likewise, it would bar suit by a Piper shareholder who exchanged his stock for Chris-Craft stock, in the reasonable and legally protected expectation that Chris-Craft would have a fair opportunity to acquire control of Piper. Petitioners’ argument simply cuts too far.

 The only material in the record which I have been able to locate and *71which is relevant to this issue is the following colloquy from a pretrial conference on September 25, 1970:
“MR. LIMAN: That has nothing to do with us, your Honor. I am speaking of Chris-Craft. I think that the argument was made that they shouldn’t have to pay this woman in part because we were seeking to enjoin them here [the record does not contain the complete transcript and it is unclear what this refers to], but in the light of the way in which they have managed this company for a year I’m not seeking injunctive relief here. It wouldn’t do me any good here to get back Piper. I am seeking damages. As to that I don’t think I have anything to do with this case now. You can pay that woman as far as I am concerned.
“MR. RYAN: Do I understand that to be an irrevocable position, Mr. Liman?
“MR. LIMAN: You can understand that I am seeking damages here.” App. in No. 72-1064 (CA2), p. 1105A.
Two pages later, the following exchange took place:
“THE COURT: I thought that you wanted them to rescind 112,000 shares, the 112,000 share transaction.
“MR. LIMAN: I want money now, your Honor.
“THE COURT: I know you say that now. But the papers up to this point, and in the Court of Appeals talked about having Bangor Punta give back the 112,000 shares or tender or rescind.
“MR. LIMAN: Not these shares that were involved here. The shares they got in the exchange offer, yes, your Honor. And at that time Piper was worth getting. But we lost that injunction to keep them from exercising control over Piper and they have consolidated their position, and I just don’t think, with all the powers that this Court has, you could give effective injunctive relief that would put me in the position that I should have been in in August of 1969. That’s why money is the only thing that is left....” Id., at 1106A-1107A.
The position taken by Chris-Craft’s counsel in the Court of Appeals was as follows:
“It is very difficult to conceive of how we can be put in a position to ever compete with Bangor Punta for control again particularly since they owned the swing blocks. If we were directed to sell them as the seller, *72they could afford to buy them at any price since they were buying their own stock.
“So there were such practical difficulties in attempting to work out an equitable decree after two years in a frozen out minority position that a relief in which they were told paid for the shares now, 'You have done everything else to them,’ seemed to be the most appropriate.
“However, if for any reason we are told that money damages are not appropriate in this case then we need equitable relief of some sort that will restore us to what we had lost the opportunity to do, which was, namely, control of Piper.” Tr. of Oral Arg. in No. 72-1064 (CA2), p. 9. Somewhat later in argument, counsel repeated:
“I think that there is equitable relief that could be fashioned. Bangor Punta could be enjoined from voting the controlled shares. That would have the effect of putting Chris-Craft in a controlling position and they, of course, object very much to that.” Id., at 16.

 In its memorandum in opposition to Chris-Craft’s motion for a preliminary injunction, Bangor Punta made this statement, pp. 24-25:
“Even assuming Chris-Craft can prove the allegations in its moving papers at a full trial after Bangor Punta has had the opportunity of properly preparing itself for trial, a money judgment will fully compensate Chris-Craft for any damages it allegedly suffered because the Public holders of the 107,574 shares elected to go with Bangor Punta.”

 Indeed, counsel for Bangor Punta expressly stated at oral argument that a tender offeror’s standing to seek injunctive relief under § 14 (e) was unchallenged. Tr. of Oral Arg. 12.

 On the issue of causation, I would simply note that Chris-Craft’s recovery includes elements of damages which were not dependent on proof that it would have acquired actual control but for petitioners’ violations. And I should also note that I would not affirm the Court of Appeals’ calculation of the total damages award.