Securities and Exchange Commission v. National Securities, Inc., a Corporation

Before us is an appeal under 28 U.S.C. § 1291 by the plaintiff below and appellant in this court, Securities and Exchange Commission, from a final judgment of the United States District Court for the District of Arizona granting judgment on the pleadings for the defendants below, appellees here. The action was brought pursuant to Section 21(e) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78u(e), to enjoin violations of the antifraud provisions of that Act. Sec. 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5 of that Act, 17 CFR 240.10b-5, and for other relief.

Appellant sought to undo the merger of two stock life insurance companies on the ground that the proxy solicitation material mailed to the stockholders of the two firms contained positive misrepresentation of material facts, and also failed to state material facts necessary to make the statements therein not misleading in light of the circumstances under which they were made.

Appellee National Securities, Inc. is a Colorado corporation doing business in Arizona as a holding company owning a controlling interest in the stock of National Life & Casualty Insurance Company, an Arizona corporation. Appellees Wallace,…