Brief Fact Summary. A suit was filed by Green (Plaintiff) to set aside a merger for securities laws violations.
Synopsis of Rule of Law. Securities laws cannot be utilized to set aside a merger which is valid under state law where no evidence of fraud, misrepresentation or a suppression of substantial information exists.
Issue. Will a private action under Rule 10b-5 or § 10(b) be sustained where allegedly there is only discrimination or breach of fiduciary duty?
Held. (White, J.) No. Federal law fails to remove state corporate merger and fiduciary laws. a short-form merger may be implemented only to eradicate minority shareholders with no notice or voting needed. As a universal rule, federal securities laws have no influence on state statutes like this. Anti-manipulative stipulations that relate to missing information and errors are Rule 10b-5 and § 10(b). They have no use to claimed actions of injustice or breach of fiduciary duty which are usually have been consigned to state law. Distortion, absence of information and the like were lacking. All pertinent information and decisions were revealed. Also, there was an accessible state resolution that was explicitly brought to the attention of all minority shareholders. No intention of our securities laws would be assisted by moving into the subject protected by this complaint. The action was correctly dismissed. Reversed and remanded.
Discussion. There was a plausible, swift state resolution accessible and the only concern was a determination of the stock’s value appeared to be the main focus of Santa Fe. The Court could have held that a simple reveal of ample information is lacking, if they chose to. Instead, it needs to be revealed in a significant way to help the inexperienced shareholder. Comprehensive examination of the balance sheets to decide that an offer is not fair may not be ample notice of all significant information.