SECURITIES & EXCH. COM'N v. CAPITAL GAINS RESEARCH BUR.
Decision Date | 01 March 1961 |
Citation | 191 F. Supp. 897 |
Parties | SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. CAPITAL GAINS RESEARCH BUREAU, INC., Harry P. Schwarzmann, Defendants. |
Court | U.S. District Court — Southern District of New York |
Paul Windels, Jr., Regional Administrator, Arthur Goldman, Chief Enforcement Atty., Henry R. Bright, New York City, for Securities and Exchange Commission.
Fennelly, Douglas, Eagon, Nager & Voorhees, New York City, for defendants; Leo C. Fennelly, New York City, of counsel.
Plaintiff seeks a preliminary injunction against the carrying on of business practices which it alleges contravene the provisions of section 206, subdivisions (1) and (2), of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-6(1) and (2). The entire section 206 as amended in 1960, reads as follows:
Defendant Capital Gains Research Bureau, Inc. is an investment adviser which publishes its advice in widely circulated bulletins and defendant Harry P. Schwarzmann is its president and sole stockholder.
Plaintiff cites five instances where defendants took a long position in a stock where they then advised the purchase of the stock without making any disclosure of their position or intention, where there was immediately increased activity in the stock with a rising market and where defendants within a few days sold their stock at a profit.
Plaintiff cites one instance where defendants took a short position in a stock, where they then advised their clients that it was overvalued without making any disclosure of their position or intention, where there was immediately increased activity in the stock with a falling market and where defendants within a few days bought in the stock at a profit.
There is no claim of a violation of subdivisions 3 or 4 of section 206.
Subdivisions 1 and 2 deal in general with fraud. Is the course of conduct charged one which "operates as a fraud or...
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SECURITIES & EXCH. COM. v. Capital Gains Research Bureau
...opposing the application. The District Court upon this proof denied the motion for a preliminary injunction and vacated the stay. 191 F.Supp. 897 (1961). The SEC appealed. A panel of this court affirmed the district court's order. 2 Cir., 300 F.2d 745. A petition of the SEC for a rehearing ......
- Securities and Exchange Commission v. Capital Gains Research Bureau, Inc, 42
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Securities and Exchange Commission v. Texas Gulf Sulphur Company
...technical common law sense and that the Commission had failed to establish an intent to injure clients or an actual loss to clients. (191 F.Supp. 897, 898.) The Second Circuit Court of Appeals, sitting en banc, affirmed the district court by a 5-to-4 vote. (306 F.2d In reversing, the Suprem......