Junger v. Hertz, Neumark & Warner, 128
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
| Writing for the Court | PER CURIAM |
| Citation | 426 F.2d 805 |
| Parties | Simon JUNGER, Plaintiff-Appellant, v. HERTZ, NEUMARK & WARNER, Defendant-Appellee. |
| Docket Number | Docket 33701.,No. 128,128 |
| Decision Date | 06 May 1970 |
426 F.2d 805 (1970)
Simon JUNGER, Plaintiff-Appellant,
v.
HERTZ, NEUMARK & WARNER, Defendant-Appellee.
No. 128, Docket 33701.
United States Court of Appeals, Second Circuit.
Argued May 4, 1970.
Decided May 6, 1970.
Simon Junger, pro se.
Mortimer Goodman, New York City (Grandefeld & Goodman, New York City, on the brief), for defendant-appellee.
Before LUMBARD, Chief Judge, WATERMAN, Circuit Judge, and JAMESON,* District Judge.
PER CURIAM.
Junger brought this action under the securities laws, seeking to recover $5,000 he lost because Hertz, Neumark & Warner, a member firm of the New York Stock Exchange, allegedly violated section 7(c) of the Securities Act of 1934, 15 U.S.C. § 78g(c) (1964) by its participation in certain transactions which occurred in 1965 and 1966. Section 7(c) provides that
It shall be unlawful for any * * * broker * * * directly or indirectly, to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer —
(1) On any security * * * in contravention of the rules and regulations which the Board of Governors of the Federal Reserve System shall prescribe * * *.
Regulation T, promulgated by the Federal Reserve pursuant to this section, has long provided that a broker cannot arrange for a third party to extend credit in a greater amount than the broker could extend to the customer directly. Junger attempted to prove below that one Gelber, a registered representative of defendant, arranged a loan between Junger and one Stark, a money-lender and factor who supplied funds to Junger to purchase securities which themselves became the security for the loans. It is undisputed that the credit extended by Stark was far in excess of that which Hertz, Neumark could have itself extended consonant with the prevailing margin requirements. Judge Bonsal gave judgment for defendant on Junger's failure of proof, and we affirm.
It has long been settled that a person for whom a broker has unlawfully arranged credit has a private right of action against the broker for violation of section 7(c). See Smith v. Bear, 237 F.2d 79 (2d Cir. 1956); Remar v. Clayton Securities Corp., 81 F.Supp. 1014 (D. Mass.1949); Note, Federal Margin Requirements as a Basis for Civil Liability, 66 Colum.L.Rev. 1462, 1467-71 (1966). But an essential element in such a suit is establishing that the broker had sufficient connection with the extension of credit by a third party.1
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Pearlstein v. Scudder & German, 92
...was the situation envisioned in the dictum in Smith v. Baer, 237 F.2d 79, 87-88 (2 Cir. 1956), see also Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2 Cir. 1970), both affirming judgments for the defendants.8 Pearlstein, an experienced speculator, was no lamb, and the trial judge specif......
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Stern v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 78-1377
...S.Ct. 356, 38 L.Ed.2d 237 Reh. denied 415 U.S. 960, 94 S.Ct. 1492, 32 L.Ed.2d 576 (1974); Junger v. Hertz, Neumark & Warner (2d Cir. 1970) 426 F.2d 805 at 806, n. 1, Cert. denied 400 U.S. 880, 91 S.Ct. 125, 27 L.Ed.2d 118; Architectural League of New York v. Bartos (S.D.N.Y.1975) 404 F.Supp......
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Evans v. Kerbs and Co., 74 Civ. 5621 (JMC).
...429 F.2d 1136 (2d Cir. 1970), cert. denied, 401 U.S. 1013, 91 S.Ct. 1250, 28 L.Ed.2d 550 (1971); Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2d Cir.), cert. denied, 400 U.S. 880, 91 S.Ct. 125, 27 L.Ed.2d 118 (1970); Bell v. J. D. Winer & Co., Inc., 392 F.Supp. 646 (S.D. N.Y.1975). Cf. ......
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Nathanson v. Weis, Voisin, Cannon, Inc., 70 Civil 215.
...See e. g., J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964) (section 14(a)); Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2d Cir. 1970) (section 7(c)); Dann v. Studebaker Packard Corp., 288 F.2d 201 (6th Cir. 1961) (section 14(a)); Remar v. Clayton Sec. Corp.,......
-
Pearlstein v. Scudder & German, 92
...was the situation envisioned in the dictum in Smith v. Baer, 237 F.2d 79, 87-88 (2 Cir. 1956), see also Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2 Cir. 1970), both affirming judgments for the defendants.8 Pearlstein, an experienced speculator, was no lamb, and the trial judge specif......
-
Stern v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 78-1377
...S.Ct. 356, 38 L.Ed.2d 237 Reh. denied 415 U.S. 960, 94 S.Ct. 1492, 32 L.Ed.2d 576 (1974); Junger v. Hertz, Neumark & Warner (2d Cir. 1970) 426 F.2d 805 at 806, n. 1, Cert. denied 400 U.S. 880, 91 S.Ct. 125, 27 L.Ed.2d 118; Architectural League of New York v. Bartos (S.D.N.Y.1975) 404 F.Supp......
-
Evans v. Kerbs and Co., 74 Civ. 5621 (JMC).
...429 F.2d 1136 (2d Cir. 1970), cert. denied, 401 U.S. 1013, 91 S.Ct. 1250, 28 L.Ed.2d 550 (1971); Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2d Cir.), cert. denied, 400 U.S. 880, 91 S.Ct. 125, 27 L.Ed.2d 118 (1970); Bell v. J. D. Winer & Co., Inc., 392 F.Supp. 646 (S.D. N.Y.1975). Cf. ......
-
Nathanson v. Weis, Voisin, Cannon, Inc., 70 Civil 215.
...See e. g., J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964) (section 14(a)); Junger v. Hertz, Neumark & Warner, 426 F.2d 805 (2d Cir. 1970) (section 7(c)); Dann v. Studebaker Packard Corp., 288 F.2d 201 (6th Cir. 1961) (section 14(a)); Remar v. Clayton Sec. Corp.,......