Appel v. Levine
| Decision Date | 11 November 1948 |
| Citation | 85 F. Supp. 240 |
| Parties | APPEL v. LEVINE et al. |
| Court | U.S. District Court — Southern District of New York |
Jac M. Wolff, New York City, for plaintiff.
Glatzer, Glatzer & Diamond, New York City (Harold Glatzer, New York City, of counsel), for defendants Gordon B. Todd and Edgar B. Hunt.
This is a motion by defendants Todd and Hunt, members of the stock brokerage firm of Gordon B. Todd & Co., for an order (1) dismissing the action, pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure, 28 U.S.C.A., on the ground that the complaint fails to state a claim upon which relief can be granted; (2) striking out the complaint, pursuant to Rule 8(e) (1), because its averments are not concise, simple and direct; or, in the alternative, if these two motions are denied, (3) directing the service of an amended complaint, pursuant to Rule 10(b), setting forth each claim, as it is founded upon separate transactions or occurrences, in separate counts; and (4) requiring plaintiff, pursuant to Rule 12(e), to serve and file more definite statements or a bill of particulars with respect to a large number of matters.
The action was brought to enforce a liability created by the Securities Exchange Act of 1934, 15 U.S.C.A. § 78a et seq., and of the rules and regulations promulgated thereunder. It appears from the complaint that the liability sought to be enforced resulted from the alleged violation by defendants of Regulation "T", prescribed by the Federal Reserve Board under the authority of Section 7(a) of the Act, 15 U.S. C.A. § 78g (a), effective as of February 1, 1947, which provided that the maximum loan value of a registered security in a general account shall be 25% of its current market value.
The defendants are the members of two stock brokerage firms — Sartorius & Co. and Gordon B. Todd & Co. — and Milton Levine, the manager of a branch office of Sartorius & Co. One or more members of Sartorius & Co. are alleged to be members of the New York Stock Exchange, and both firms are alleged to have transacted business in securities through the medium of various members of the New York Stock Exchange and the New York Curb Exchange, both of which are national securities exchanges. Todd & Co. are alleged to be dealers and brokers who were required to register with the Securities and Exchange Commission, but who failed to do so in order to conceal the true nature of the acts complained of.
It is then alleged that prior to September 1947, plaintiff was a customer...
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