Baron v. Shields
Decision Date | 15 April 1954 |
Citation | 131 F. Supp. 370 |
Parties | Harold K. BARON Individually and Harold K. Baron, suing on behalf of himself and all other persons similarly situated who are holders of Bellevue Bridge Commission, Nebraska, Bridge Revenue Bonds, Plaintiffs, v. Paul V. SHIELDS, Cornelius Shields, Eugene P. Barry, Vladimir N. Bashkiroff, Herbert H. Childs, Robert T. Veit, Macral Sykes, Bernard F. Toole, Theodore Lyman Crockett, et al., doing business as co-partners under the firm name and style of Shields & Co., Bellevue Bridge Commission (Nebraska), L. L. Lawrence, Raymond N. Jungers, Harold C. Ludwig and Samuel Cohen, Defendants. |
Court | U.S. District Court — Southern District of New York |
Jacobus, Baron & Rose, New York City, for plaintiff.
Cahill, Gordon, Zachary & Reindel, New York City, for defendants. Paul V. Shields and others, doing business as co-partners under the firm name and style of Shields & Co.
Horace E. Pascal, New York City, for defendants L. L. Lawrence, Raymond N. Jungers, Harold C. Ludwig and Bellevue Bridge Commission (Nebraska).
Defendants, L. L. Lawrence, Raymond N. Jungers, Harold C. Ludwig and Bellevue Bridge Commission (Nebraska), move to dismiss the complaint on the ground that it does not state a claim against them upon which relief can be granted and move to set aside the service of the summons on them on the ground that it was served in Nebraska rather than within the Southern District of New York. The action is one brought by the purchaser of bonds of the Bellevue Bridge Commission against defendants, consisting of the members of a securities firm which sold the bonds to him, the salesmen for that firm and the moving defendants who, besides the Commission, are, respectively, the chairman and remaining two members of the Commission. The action alleges false and fraudulent representations with respect to the bonds.
So far as the moving defendants are concerned, the complaint alleges that the securities firm prepared a printed brochure to induce the public to purchase Bellevue Bridge bonds entitled, "Official Statement of the Bellevue Bridge Commission (Nebraska) Relating to Its Bridge Revenue Bonds", and purported to be signed at the end by the chairman of the Commission. There are other allegations in the complaint which, very liberally construed, can be read to charge that the moving defendants made representations in the "Official Statement" which were false and known to them to be false and upon the truth of which plaintiff relied in purchasing the bonds. The complaint further alleges that the securities firm used United States mails in effectuating the sale and that the sale took place in the City of New York. From the allegations which are construed as meaning that the moving defendants made the representations to the plaintiff through the brochure, I feel that I can go farther and find that the complaint, as a whole, alleges that the defendants made the representations in the City of New York where the sale was made.
Plaintiff urges that he has stated a claim under several of the provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. I conclude that he has stated such a claim within section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). That section reads:
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