NCJ Number
116267
Journal
Journal of Contemporary Law Volume: 13 Issue: 2 Dated: (1987) Pages: 355-364
Date Published
1987
Length
10 pages
Annotation
In its 1985 decision in Lewis v. McAdam, the Ninth Circuit Court interpreted standing narrowly as defined by Section 16(b) of the Securities Exchange Act of 1934 and thereby reached a fair result without resorting to drafting judicial legislation.
Abstract
Thus, the court limited standing to the issuer or holders of securities of the issuer. The case involved a suit by Sears shareholder Harry Lewis that Sears recover the short swing profits that William McAdam had made by acquiring shares of Coldwell Banker and selling them to Sears in a 6-month period. The district court granted summary judgment to Sears, Sears Development Corporation, and McAdam, who contended that Lewis lacked standing and that McAdam's actions did not constitute a purchase and sale as defined by Section 16(b). The decision in this case contrasted with that in the case of Blau v. Oppenheim, in which the judicial decision overlooked that statute's literal command in the attempt to justify a particular policy reading. Instead, the court in Lewis interpreted the statute as literally as possible, emphasizing that Congress could discourage the practice involved by conferring standing on shareholders of a parent corporation. 62 footnotes.