Court Opinion

ID: 8910150
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:38:35.932109+00
Date Added: 2024-06-11T17:08:27.472827
License: Public Domain

On Petition for Rehearing

J. JOSEPH SMITH, Circuit Judge.
The appellee-trustees have filed a petition for rehearing in light of the Supreme Court’s recent decision in International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 99 S.Ct. 790, 58 L.Ed.2d 808 (1979). This case, however, does not involve the issues decided in Daniel, which held that an interest in a non-contributory, compulsory pension plan is not a security within the meaning of § 2(1) of the Securities Act of 1933,15 U.S.C. § 77b(l), or § 3(a)(10) of the Securities Exchange Act of 1934, 15 U.S.C. § 78c(a)(10). Kirshner does not claim that his pension interest under the System is a security. He contends rather that fraud was perpetrated by the trustees in connection with the fund’s purchase of MAC and NYC bonds, which the trustees cannot and do not contend are not securities. Thus Kirshner merely is suing derivatively as a trust beneficiary to attack the fraud allegedly perpetrated upon the fund by the trustees in connection with the purchase of these securities. See, Kirshner v. United States, 603 F.2d 234, 240 (2d Cir. Nov. 30, 1978).
Daniel also has no effect on our conclusion that a private right of action exists under § 17(a) of the 1933 Act, 15 U.S.C. § 77q, since the Court found it unnecessary to reach that issue. 439 U.S. at 557 n. 9, 99 S.Ct. 795.
The petition for rehearing is denied.