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Argued May 11, Decided June 10, The within appeals bring before us for the second time the well-known combinations of situations that arose out of Texas Gulf Sulphur's hereinafter TGS discovery of rich ore deposits near Timmins, Ontario, and the accompanying stock transactions by the appellants.
A detailed description is set forth in our prior opinion, F. That hearing has been held, and varying sanctions have been applied. The judgment order entered below 1 enjoined defendants Clayton and Crawford from future violations of Rule 10b-5, 2 denied injunctions against TGS, and defendants Fogarty, Mollison, Stephens, Darke, Huntington, Holyk, and Kline although each was found to have violated 10b-5, 3 required Darke to pay to TGS the profits which he and his tippees made on TGS stock prior to April 17,4 required Holyk, Huntington, and Clayton to pay to TGS the profits which each of them made on the TGS stock prior to April 17, and 5 required Kline's stock option to be canceled.
In deciding the issues presented on this appeal, we have grouped the issues for easier discussion. TGS — The April 12 press release. On April 12,TGS issued its now famous press release dispelling rumors about the results of its exploratory drilling at Timmins.
In our Texas gulf sulphur case study opinion we found that this release satisfied all the elements of a violation of Rule 10b-5, with the exception that a hearing was neeeded in order to determine whether the release was "misleading to the reasonable investor," F.
On remand Judge Bonsal received both live and deposition testimony from a series of former TGS shareholders who claimed to have sold their stock because of the contents of the April 12 press release. Counsel for TGS objected to this testimony as non-expert opinion testimony of the ultimate fact for decision by the trier of fact, that is, whether the release was misleading.
When these objections were overruled, TGS presented its own string of witnesses who testified that in their opinion the release was optimistic and not misleading. Nevertheless, because there was no showing of any reasonable likelihood that TGS would violate Section 10 b and Rule 10b-5 in the future, Judge Bonsal denied the SEC's request for an injunction against the corporation.
Upon appeal TGS first contends that the admission of non-expert opinion testimony as to whether the press release was misleading was error.
We first note that, contrary to the TGS contention, this testimony did not go to the ultimate issue. The ultimate issue was whether the release was "misleading to the reasonable investor. There is little doubt that the testimony offered by the SEC was relevant to whether the release was misleading to the "reasonable investor," but its relevance does not mean that the testimony itself was of the ultimate fact.
Nor does the claim that the testimony was possibly opinion testimony render it inadmissible. All human perception includes elements of subjective conclusions, and the line between factual and opinion testimony is often undefinable. No rule is subject to greater abuse [than the opinion testimony rule]; it is frequently an obstacle to any intelligible account of what happens.
Most witnesses will tell their story in colloquial speech which skips the foundations and runs in terms of the "ultimate facts. See also United States v. Of course, a foundation for opinion testimony must be laid, see RuleProposed Rules of Evidence for United States Courts and Magistrates Marchand, without question, a foundation was laid here.
In such cases, especially where there is no jury, the admission of this kind of testimony lies quite properly within the discretion of the trial court. TGS also points to a number of facts which it claims makes the SEC's witnesses appear to be "unreasonable," instead of "reasonable," investors.
However, these factors go only to the weight of the evidence and were thoroughly explored by TGS upon cross-examination.
We conclude that Judge Bonsal's findings of fact on this issue, after his careful and pains-taking weighing of the conflicting testimony in the light of our prior opinion, are not clearly erroneous findings, and we hold, with him, that the press release of April 12 was indeed misleading to the reasonable investor.
TGS next contends that it exercised due diligence in issuing the April 12 press release. However, the district court found, on the basis of the standard laid down in our former opinion, that "the framers of the press release failed to exercise due diligence.
TGS urges that this finding was not an independent finding of fact but a mere adoption of the views in our previous opinion. On this isue TGS introduced no additional evidence on remand, and, without such additional testimony, the fact that the district judge's finding concurred with what TGS claims to have been the view of the in banc court in no way impeaches the independence of the district judge.
We find nothing improper in the challenged finding of lack of due diligence. TGS finally contends that the finding of a violation of Rule 10b-5 for  mere negligence in the issuance of the April 12 press release infringes its First Amendment rights. Wall Street Transcript Corp.Law School Case Briefs | Legal Outlines | Study Materials Texas Gulf Sulphur Co.
case brief Securities and Exchange Commission v. Texas Gulf Sulphur Co. case brief summary F.2d (2d Cir. ) CASE SYNOPSIS. The SEC Takes Command Texas Gulf Sulphur. The opportunity to extend that administrative rule to the common law would be mined in the financial transactions surrounding the discovery of copper and zinc ore in deposits owned by the Texas Gulf Sulphur Company near Timmins, Ontario.
Texas Gulf Sulphur: The Timmins Ontario Mine.
MENU. Texas Gulf Sulphur: The Timmins Ontario Mine case study and directors of Texas Gulf Sulphur acquired or tipped off others to acquire. Texas Gulf Sulphur: The Timmins Ontario Mine Case Solution,Texas Gulf Sulphur: The Timmins Ontario Mine Case Analysis, Texas Gulf Sulphur: The Timmins Ontario Mine Case Study Solution, TEXAS GULF SULPHUR: THE TIMMINS ONTARIO MINE INTRODUCTION: Texas Gulf Sulphur was operating as a mining company and the .
Securities and Exchange Commission v. Texas Gulf Sulphur Co; Securities and Exchange Commission v. Texas Gulf Sulphur Co.
Search. Table of Contents. Corporations Keyed to Klein. Plaintiff, the Securities and Exchange Commission, brought this suit against Defendants, Texas Gulf Sulphur Co., et al., after Defendants . Plaintiff, the Securities and Exchange Commission, brought this suit against Defendants, Texas Gulf Sulphur Co., et al., after Defendants bought shares of Texas Gulf while they secretly had positive information regarding mining activities carried out by the company.