Court Opinion

ID: 8879569
Source: CourtListenerOpinion
Date Created: 2022-11-26 20:07:15.481654+00
Date Added: 2024-06-11T17:06:34.190796
License: Public Domain

HAYS, Circuit Judge
(concurring in part and dissenting in part):
I concur generally with Judge Waterman in his views as to the proper interpretation of Section 10(b) and Rule 10b-5 and as to the standards which are to be employed in the application of the statute and the rule.
With the exception of Stephens and Fogarty as recipients of stock options, I agree with the majority on the disposition of the cases involving individuals.
I do not agree on the remand of the issue with respect to Stephens and Fo-garty as recipients of stock options. It seems to me clear that the injunction sought by the Commission should be granted.
The majority remand the case against the corporate defendant to the district court for a determination as to whether the April 12 press release was misleading and whether, if so, those responsible for the release used due diligence.
In my opinion the evidence establishes as a matter of law that the press release was misleading. Indeed, if the correct standard is applied, the finding of the trial court requires the conclusion that the press release was misleading:
“At 7:00 p. m. on April 9, those with knowledge of the drilling results had material information which it was reasonably certain, if disclosed, would have had a substantial impact on the market price of TGS stock.”
.The evidence in the record in support of this finding is overwhelming.
Assuming arguendo that the corporation cannot be enjoined except on a showing of lack of due diligence, since Fogarty and those who assisted him in the preparation of the press release were aware of the drilling results to which the district court’s finding refers, they obviously did not use due diligence *870in the preparation of the misleading press release.
I would grant the application for an injunction.