Rheem Manufacturing Company, a Corporation v. R. S. Rheem, Ann J. Mathes, Intervenor

At the request of Ann J. Mathes, one of its stockholders, appellant company instituted a suit for the recovery of profits realized by appellee Richard S. Rheem from the alleged purchase and sale, within six months, of securities in Rheem Manufacturing Company (hereinafter the Company) listed on the New York Stock Exchange. In its suit the Company sought to invoke the “insider trading” provisions of the Securities Ex change Act of 1934, 15 U.S.C.A. § 78p (b).

We reach the conclusion that the judgment of the trial court should be affirmed.

The Board of Directors of the Company determined that the judgment of the trial court should not be appealed, but the stockholder thought otherwise and with the permission of this court intervened and perfected an appeal.

Appellee Rheem is a director of the Company and was its chief executive officer from 1926 until his resignation on June 5, 1958. In 1949 the Company adopted an Employees’ Incentive Bonus Plan and Trust (hereinafter the Plan) for the purpose of providing retirement benefits in the form of insurance, annuities, Company stock or cash to eligible and participating employees, of which Mr. Rheem was one. The Plan and accompanying…