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Articles 541 - 570 of 697

Full-Text Articles in Securities Law

A Warning Signal For Municipal Bondholders: Some Implications Of Erie Railroad V. Tompkins, Irvin Long Feb 1939

A Warning Signal For Municipal Bondholders: Some Implications Of Erie Railroad V. Tompkins, Irvin Long

Michigan Law Review

That branch of municipal bond litigation in which the character and validity of the obligations is involved has usually been conducted in the federal courts. Bondholders pressing for payment of their defaulted bonds usually are nonresidents of the state where the city, county or other defaulting municipality is located. Varying and contradictory state court decisions taught them that no settled rule of decision in the state courts could be expected. The arguments of their counsel, which many of the earlier volumes of the Supreme Court reports preserve, show that they distrusted a judiciary elected for short terms, as was the …

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Corporations - Negotiability Of Stock Certificates - Uniform Stock Transfer Act, Charles R. Linton Jan 1939

Corporations - Negotiability Of Stock Certificates - Uniform Stock Transfer Act, Charles R. Linton

Michigan Law Review

Plaintiff holding company was incorporated with Murtland and two dummies as shareholders and officers. Murtland pledged a stock certificate, representing shares of another corporation owned by his corporation, with the defendant bank to secure a personal loan; an assignment and power of attorney was executed by the plaintiff through Murtland and one of the dummy shareholders as officers, the other shareholder having knowledge of the transaction. Upon the bankruptcy of Murtland, defendant sought to sell the collateral; plaintiff seeks to enjoin the sale on the ground that the assignment had not been authorized by its board of directors. Held, …

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Securities Legislation - Securities Act - Stop Order Proceedings - Administrative Tests Of Materiality, Bertram H. Lebeis Jan 1939

Securities Legislation - Securities Act - Stop Order Proceedings - Administrative Tests Of Materiality, Bertram H. Lebeis

Michigan Law Review

With a view toward correcting many of the abuses which had accompanied the distribution of securities, the Congressional mandate embodied in the Securities Act of 1933, together with the regulations of the Securities and Exchange Commission adopted in pursuance thereof, require the publication of much information previously withheld from the investing public. The basic objective of the act is the full disclosure of every essentially important element attending issues of securities in interstate commerce or through the mails, and to that end the commission is empowered to issue a stop order suspending the effectiveness of a registration statement if it …

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Taxation -Income Tax - Profit On Sale Of Securities - Identification Of Shares Sold, Milton A. Kramer Jan 1939

Taxation -Income Tax - Profit On Sale Of Securities - Identification Of Shares Sold, Milton A. Kramer

Michigan Law Review

The taxpayer ordered his broker to sell certain shares of stock purchased in March, 1929, which were on deposit at a bank. He then ordered the bank to deliver a thousand shares from certificates numbered 80250 to 80258 inclusive, and 80264. It does not appear whether the instructions were written or oral. The bank, however, delivered by mistake certificates from another lot which had a considerably lower cost basis and had been held as collateral since 1925. The Board of Tax Appeals concluded that the shares delivered to the broker as represented by the certificates were the shares actually sold …

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Securities Legislation - Accounting Practice And The Securities Act Of 1933, Paul R. Trigg Jr. Dec 1938

Securities Legislation - Accounting Practice And The Securities Act Of 1933, Paul R. Trigg Jr.

Michigan Law Review

Item 25 of the registration regulations under the Securities Act of 1933 requires the registrant to "submit balance sheets . . . as of a date within ninety days of the filing of the registration statement." The approximate form which such balance sheets are to take is indicated in the regulations, as well as the manner of certification required. So far as the form of the balance sheet proper is concerned, it is doubtful whether item 54 presents any new or startling innovations, but when the balance sheet and the supplementary schedules required to be appended thereto are considered, it …

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Corporations - Securities Exchange Act - Unlisted Trading Privileges, Marcus L. Plant Nov 1938

Corporations - Securities Exchange Act - Unlisted Trading Privileges, Marcus L. Plant

Michigan Law Review

Under the Securities Exchange Act of 1934, as amended in 1936, the Securities and Exchange Commission is empowered to extend unlisted trading privileges to any security upon application by an exchange and the fulfillment of the terms and conditions of the statute.

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Taxation - Federal Income Tax - Payment To Employees As Compensation Or Gift, Ralph Winkler Jun 1938

Taxation - Federal Income Tax - Payment To Employees As Compensation Or Gift, Ralph Winkler

Michigan Law Review

The Universal Oil Products Company had been "extraordinarily successful," and its interests were very large and valuable. The stockholders transferred their stock to another corporation and the cash assets to the Unopco Corporation, an organization formed for the express purpose of managing this fund, whose stockholders were the same as of the former Universal Oil Products Company. At a stockholders' meeting, a resolution was adopted which in effect provided that a sum of money be allocated for payment to those employees who had loyally supported the former company. At the time this resolution was adopted the president of the new …

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Taxation-Income Tax-Refund For Overpayment-Equitarle Defense By Government When Collection Of Deficiency Barred By Limitations, Michigan Law Review Jun 1938

Taxation-Income Tax-Refund For Overpayment-Equitarle Defense By Government When Collection Of Deficiency Barred By Limitations, Michigan Law Review

Michigan Law Review

Petitioner's deceased sold stock under an installment contract and made a large profit thereon. The deceased died in 1928. Under Sections 44 (d) and 113 of the Revenue Act of 1928 the executor made an underpayment for 1928, and overpayments for 1929, 1930, and 1931. The amount of the 1928 deficiency exceeded the aggregate of the overpayments for the three subsequent years. Petitioner filed a claim for refund of the overpayments. The government was barred by limitations from recovering the tax deficiency for 1928. Held, the petitioner was entitled to recover the overpayments. The government could not assert the …

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Constitutional Law -Validity Of Registration Provisions Of Public Utility Holding Company Act Of 1935, Gerald L. Stoetzer Jun 1938

Constitutional Law -Validity Of Registration Provisions Of Public Utility Holding Company Act Of 1935, Gerald L. Stoetzer

Michigan Law Review

In recognition of the abuses that arise from the monopolistic tendencies of holding companies in the public utility field and of the inability of the respective states to exert the necessary control thereof, Congress has attempted to draw certain of the public utility holding companies within the inquisitorial and regulatory control of the federal Securities and Exchange Commission. The Public Utility Holding Company Act of 1935, reciting in great detail facts showing the necessity for control of holding companies having as subsidiaries electric and gas operating utilities, indicates that Congress regarded the uncontrolled utility holding company as "an agency which, …

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Corporations - Liability Of Stockholders Of Bank Stock Holding Company For Statutory Assessment On Bank Stock., Edward J. Wendrow Jun 1938

Corporations - Liability Of Stockholders Of Bank Stock Holding Company For Statutory Assessment On Bank Stock., Edward J. Wendrow

Michigan Law Review

The late depression with its attendant bank failures and the consequent assessment of shareholders has resulted in bringing before the courts a question that has never been litigated until comparatively recent times. That is, can the shareholders of a holding company, whose assets consist of stock of the closed bank, be subjected to the statutory assessment when the corporation itself is unable to meet the assessment? The case of Nettles v. Rhett is the latest of this series, and is fairly typical of the issues involved. This case concerned a suit by the receiver of the Peoples State Bank of …

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Corporations Preferred Stock Cumulative If Not Otherwise Specified, Michigan Law Review Jun 1938

Corporations Preferred Stock Cumulative If Not Otherwise Specified, Michigan Law Review

Michigan Law Review

Ten thousand shares of preferred capital stock in defendant corporation were left in trust for plaintiff by her father. This stock was issued to discharge a debt due by the corporation to plaintiff's father, who, together with his son and his attorney, owned all the stock of the corporation. In certain of the preliminary papers the word "non-cumulative" was used, but the certificate itself, in regard to dividends, merely spells out that the "preferred capital stock shall receive annual dividends of 6%, and not more to be declared by the board of directors." For several years no dividends had been …

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Securities Legislation - Securities Act Of 1933 - Registration Statement - "Material Contract'', Gerald M. Stevens Jun 1938

Securities Legislation - Securities Act Of 1933 - Registration Statement - "Material Contract'', Gerald M. Stevens

Michigan Law Review

A registrant under the Securities Act of 1933 had borrowed from the Reconstruction Finance Corporation $200,000, payment of which was secured by mortgage of most of the debtor's assets. Registrant still owed $136,000 overdue when it filed its amended registration statement. It said therein that it had applied to the RFC for an eighteen-months extension of the debt and that the application had not then been acted upon. After the statement was filed but before it became effective, the RFC denied registrant extension of the debt and made a counter proposal for payment in part and extension in part. In …

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Taxation - Capital Gains Tax (Revenue Act Of 1928) - Reorganizations - Definition Of A Party To A Reorganization, Milton A. Kramer May 1938

Taxation - Capital Gains Tax (Revenue Act Of 1928) - Reorganizations - Definition Of A Party To A Reorganization, Milton A. Kramer

Michigan Law Review

Although "certainty" is one of the most desirable features of taxation, that quality has been conspicuously absent in regard to the portions of the 1928 Revenue Act which deal with capital gains in corporate reorganizations. In the four situations which the act sets forth as constituting a reorganization, capital gains arising therefrom are exempt from tax computation, the general purpose being to remove any impediment to normal corporate adjustments and to prevent the recognition of gains or losses until they are actually realized. However, this provision soon became an invitation for ingenious counsel to arrange the sales of corporate assets …

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Trusts - Validity - Subject Matter - Profits To Be Acquired In The Future, Paul R. Trigg Apr 1938

Trusts - Validity - Subject Matter - Profits To Be Acquired In The Future, Paul R. Trigg

Michigan Law Review

The plaintiff contemplated trading in the stock market and in 1927 declared a trust of the proceeds of his stock trading for the year 1928 in favor of various members of his immediate family, agreeing to assume all losses personally and to distribute all profits equally among the beneficiaries after deducting a reasonable compensation for his services. At the expiration of the year 1928, plaintiff deducted $10,000 as compensation, which he reported in his tax return for that year, and credited the named beneficiaries with the remainder on his books, these amount being reported in their respective tax returns for …

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Administrative Law - Investigating Powers Of Federal Commissioners - Securities And Exchange Commission, Brackley Shaw Mar 1938

Administrative Law - Investigating Powers Of Federal Commissioners - Securities And Exchange Commission, Brackley Shaw

Michigan Law Review

A recent decision in the Circuit Court of Appeals upholding the constitutionality of the powers of search granted to the Securities and Exchange Commission in the Securities Act of 1933 brings to the fore again the question of the extent to which the Federal Government may validly investigate and demand the production of the books and records of private businesses.

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Torts - Violation Of Penal Statute As Civil Wrong - Bucketing - Intentional Wrong, Michigan Law Review Mar 1938

Torts - Violation Of Penal Statute As Civil Wrong - Bucketing - Intentional Wrong, Michigan Law Review

Michigan Law Review

A statute prohibited bucketing operations by dealers in securities and commodities, and provided penalties for such offenses. Plaintiff alleges that, acting without knowledge of defendant's illegal operations, he gave the defendant an order for the purchase of stock, which, he says, was not executed, as defendant reported, but "bucketed" in a manner prohibited by statute. Plaintiff sued to recover damages. Defendant demurred on the grounds (1) that the transaction referred to was not bucketing, but (2) that if it was, defendants were not liable to this plaintiff as the latter was not within the class of persons intended to be …

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Taxation - Income Taxation Of Stock Dividends, Wallace Mendelson Feb 1938

Taxation - Income Taxation Of Stock Dividends, Wallace Mendelson

Michigan Law Review

In 1929 a stock dividend was paid to the holders of common stock in preferred stock of the dividend paying corporation, which had both common and preferred stock outstanding at the time the stock dividend was declared and paid. The taxpayer, as a holder of common stock, received his pro rata share of the dividend and subsequently within the same taxable year sold the preferred stock which he had so received as a dividend. Held, that under the Revenue Act of 1928, (1) the receipt of the stock dividend was not a taxable occasion, and ( 2) the basis …

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Corporations - Interpretation Of The "Public Offering" Exemption Of The Federal Securities Act And State Blue-Sky Laws, Gerald L. Stoetzer Feb 1938

Corporations - Interpretation Of The "Public Offering" Exemption Of The Federal Securities Act And State Blue-Sky Laws, Gerald L. Stoetzer

Michigan Law Review

Section 5 of the Federal Securities Act of 1933, as amended, declares that it shall be unlawful to use any means of transportation or communication in interstate commerce or of the mails to dispose of securities or transmit a prospectus thereon unless a registration statement as required by the act is in effect and unless the prospectus meets the statutory requirements. However, certain securities and transactions are expressly exempted from application of the act. Among the exemptions set out in section 4 are those "transactions by an issuer not involving any public offering."

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Expansion Of Federal Supervision Of Securities Through The Inquisitional And Census Powers Of Congress-A Suggestion, Kenneth Rush Jan 1938

Expansion Of Federal Supervision Of Securities Through The Inquisitional And Census Powers Of Congress-A Suggestion, Kenneth Rush

Michigan Law Review

The Securities Act and the Securities Exchange Act, principally through the means of compulsory disclosure of information, are intended to aid the investing public in evaluating securities and to prevent the undue influencing of their value, market price and sale. These ends are undoubtedly worth seeking in their entirety, but such is the nature of our federal system that the acts, being founded upon the powers of Congress over the facilities of interstate commerce and of the mails, purport to relate only to transactions in securities involving use of those facilities.

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Corporations - Corporate Form Used To Evade Bank Double Liability, Michigan Law Review Jan 1938

Corporations - Corporate Form Used To Evade Bank Double Liability, Michigan Law Review

Michigan Law Review

Plaintiff, the receiver for an insolvent bank, sued the individual stockholders of an investment corporation on an assessment to the amount of the par value of the bank stock as provided by the constitution and statutes of South Carolina. The investment corporation had been organized several years previously to secure control of a group of banks. Its holdings throughout consisted only of bank stock, and finally solely of stock of the closed bank. Plaintiff claimed, since the corporation had no assets, that the stockholders of the investment corporation were individually liable, because the use of a holding company for the …

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Bankruptcy - Corporate Reorganization - Effect Of Release Of Collateral Obligor On Dissenting Creditors, Edward D. Ransom Dec 1937

Bankruptcy - Corporate Reorganization - Effect Of Release Of Collateral Obligor On Dissenting Creditors, Edward D. Ransom

Michigan Law Review

The federal district court confirmed a plan of reorganization of debtor corporation, under section 77B of the Bankruptcy Act, which expressly released defendant from liability as guarantor of bonds of the corporation and provided for cancellation of the bonds and substitution of new certificates of stock. The plaintiff, a bondholder, made no objection when the plan was submitted to the court; objection by other bondholders was overruled. The plaintiff brought suit in municipal court on the defendant's guaranty. Defendant pleaded the confirmation of the plan by the district court as res adjudicata. The trial court denied the plea and entered …

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Corporations - Unorthodox Preferred Stock Provisions In Priority Litigation, Elbert R. Gilliom Nov 1937

Corporations - Unorthodox Preferred Stock Provisions In Priority Litigation, Elbert R. Gilliom

Michigan Law Review

To one who has accumulated sufficient savings to earn the position of a prospective purchaser of corporate securities there is presented an impressive and somewhat mystifying list of interests from which he may choose, advisedly or otherwise. Between orthodox common stock at one extreme and secured bonds at the other, ranges an endless variety of stocks embodying some bond characteristics, bonds bearing stock attributes, and a welter of certificates professing to be neither stocks nor bonds. Because individual sources of funds needed for industry do differ in their convictions as to relative advantages of different characteristics of securities, issuing corporations, …

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Corporations - Power Of Attorney To Transfer Stock On The Books Of The Corporation, Royal E. Thompson May 1937

Corporations - Power Of Attorney To Transfer Stock On The Books Of The Corporation, Royal E. Thompson

Michigan Law Review

Although a power of attorney to transfer stock on the books of the corporation is found almost as a matter of course on the reverse side of stock certificates, along with a form for assignment of the certificate, there is surprisingly little to be found in the authorities, as to why it is there. An inquiry into the reasons, if any, for such a provision is the purpose of this discussion. A decision of last summer, by the New York Supreme Court, New York County, lends present emphasis to the query. Three certificates of stock which had been indorsed in …

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Corporations - Ratification Of Unauthorized Withdrawal Of Funds By An Officer Of A Corporation, Walter Probst Jr. May 1937

Corporations - Ratification Of Unauthorized Withdrawal Of Funds By An Officer Of A Corporation, Walter Probst Jr.

Michigan Law Review

The president of a corporation withdrew funds from the corporation with which to purchase stock for his own personal benefit. He used this money so as to save the brokerage cost of his securities. A great deal of the money was repaid a few days after its withdrawal. The board of directors, discovering these activities, approved all past actions and present loans of the president. Held, the attempted ratification by the board of directors did not relieve the president from his duty of accounting for the profits realized on the stock purchased with the funds, since there had not …

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Suretyship-Effect Of Death Of Surety On Rights Of Creditor, Jacob L. Keidan Apr 1937

Suretyship-Effect Of Death Of Surety On Rights Of Creditor, Jacob L. Keidan

Michigan Law Review

In a suit on a bond filed in accordance with statutory requirements by a depository designated by a court of bankruptcy, it was pleaded in defense that the surety died before any deposits were received by the designated bank. The circuit court of appeals held for the defendant, ruling that the bond was only a multiple offer and lapsed with the death of the surety. The Supreme Court reversed this decision on the ground that the bond was a single offer, and the designation of the bank as an official depository constituted an acceptance thereof. United States for the use …

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Specific Performance - Oral Option To Buy Stock - Effect Of Provision To Fix Price By Arbitration, Michigan Law Review Mar 1937

Specific Performance - Oral Option To Buy Stock - Effect Of Provision To Fix Price By Arbitration, Michigan Law Review

Michigan Law Review

Defendant, who owned all the common stock of a bank, gave an oral option to sell it at a fixed price to plaintiff. Plaintiff was to investigate the bank's books, assets, and liabilities in order to determine the true value of the stock. If the true value did not equal the agreed price, the parties were to meet and set the amount of the diminution. In the event of disagreement, a third party was to be called in. Plaintiff expended considerable sums for investigation before defendant renounced the option and prevented further investigation. In an appeal from an interlocutory order …

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Taxation - Income Taxation Of Stock Dividends, Donald H. Larmee Feb 1937

Taxation - Income Taxation Of Stock Dividends, Donald H. Larmee

Michigan Law Review

The petitioner purchased cumulative non-voting preferred stock in a corporation. In subsequent years the company elected to pay, and the petitioner received, dividends in common voting stock. Later the company redeemed its preferred stock. In computing the profit made by the petitioner at the time of redemption, the commissioner allocated to the common stock a proportionate share of the original cost of the preferred stock. He thereupon taxed as income the difference between the redemption figure and the allocated portion of the cost. The stockholder protested, claiming that the stock dividends should be treated as income in the years in …

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Stockholders' Suits: A Possible Substitute, Harris Berlack Feb 1937

Stockholders' Suits: A Possible Substitute, Harris Berlack

Michigan Law Review

With the rapid expansion in the use of the corporate form of organization for business enterprise which has taken place during the last few decades, increasing attention has been paid by legal scholars to the question of the respective positions, rights and duties of the various components of the corporate structure. The functions, rights, obligations and liabilities of managers, officers, directors and stockholders, both majority and minority, have been analyzed and defined. Mr. Berle's analysis of corporate authority as power held in trust for the benefit of the stockholders has found wide acceptance as a comprehensive synthesis of the conclusions …

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Collateral Liabilities Under Section 77b, Homer Kripke Jan 1937

Collateral Liabilities Under Section 77b, Homer Kripke

Michigan Law Review

The passage of section 77B of the Bankruptcy Act in 1934 suggested to some lawyers the possibility of using the section as a means of modifying or eliminating the responsibility of persons collaterally liable on obligations for which the corporation to be reorganized or its property was also responsible. The question arose in two common types of situations: (1) guaranties of payment of dividends on capital stock; (2) liability for payment of the bonds or other indebtedness of corporations. In either of these situations, can the liability of persons other than the corporaticm be discharged or modified by reorganization of …

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Corporations - Parent's Liability For Subsidiary's Obligations, Michigan Law Review Jan 1937

Corporations - Parent's Liability For Subsidiary's Obligations, Michigan Law Review

Michigan Law Review

A parent corporation owned all the stock of a subsidiary which it had organized to hold real estate, its own business being mercantile. The directors and officers of both corporations were identical. The subsidiary sublet premises for ninety-nine years, in turn leasing them to the parent for ten years. Improvements were made in accordance with the subsidiary's contract, and "leasehold trust certificates" were issued by an assignee of the underlying lease. The parent quit the premises before the expiration of its lease, but paid the rent for the whole period. The subsidiary then defaulted on the ninety-nine year lease, having …

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