Fed. Sec. L. Rep. P 96,370 Securities and Exchange Commission v. Koracorp Industries, Inc.

The Securities and Exchange Commission (“SEC”) brought these two suits to obtain injunctions preventing the defendants from committing future violations of the anti-fraud and reporting provisions of the federal securities laws. The district judge granted defendants’ motions for summary judgment. The SEC appeals, contending that since material issues of fact are in dispute, the district court abused its discretion in granting summary judgment. We agree with the SEC with respect to all of the defendants except Arthur Andersen & Co. (“Andersen”). With respect to Andersen, we conclude that there was no genuine dispute as to any material fact, summary judgment was permissible, and the district court acted within the scope of its discretion in denying the injunctive relief sought.

Defendant Koracorp Industries, Inc. (“Koracorp”) is a corporation, engaged in a number of business enterprises, whose common stock is publicly traded on the New York and Pacific Coast Stock Exchanges. Defendant Koratec Communications, Inc. (“KCI”) was a wholly-owned subsidiary of Koracorp whose principal business was the publication of a controlled-circulation advertising magazine, “Homemaking with a Flair”…

concurring:

I am disturbed by the fact that the majority sends this case back for evidentiary hearings to a busy district court (the Northern District of California at San Francisco) apparently to find specifically the extent of each individual defendant’s bad conduct and what his responsibility was in the overall picture. An evidentiary hearing to ascertain the various misdeeds and responsibility of each defendant in connection therewith could well require months of a district court’s time. The same issues are present in civil actions pending against these defendants. In some way extensive evidentiary hearings in this case ought to be avoidable on remand to the district court.

The record shows that the individual defendants made admissions that violations occurred, but did not take any responsibility for particular violations (see majority opinion, supra, 575 F.2d 699 ). In view of the pending civil suits against these defendants it is understandable that they are unwilling to make further admissions as to their complicity in the overall scheme. However, perhaps they could make more specific admissions for the purpose of this motion only. Or perhaps the district judge on his…

575 F.2d 692 Fed. Sec. L. Rep. P 96,370 SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellant, v. KORACORP INDUSTRIES, INC., et al., Defendants-Appellees. Nos. 76-2547 and 76-2964. United States Court of Appeals, Ninth Circuit. Feb. 6, 1978. Rehearing Denied May 24, 1978. David Ferber (argued), Washington, D. C., for plaintiff-appellant. Richard J. Archer (argued), of Sullivan, Jones & Archer, Ralph Golub (argued), Goldstein Barceloux, & Goldstein, San Francisco, Cal., Jack I. Samet (argued), of Ball, Hunt, Hart, Brown & Baerwitz, Los Angeles, Cal., G. Douglas Floyd (argued), of Pillsbury, Madison & Sutro, San Francisco, Cal., for defendants-appellees. Appeal from the United States District Court for the Northern District of California. Before CARTER and HUFSTEDLER, Circuit Judges, and SMITH, * District Judge. HUFSTEDLER, Circuit Judge: 1 The Securities and Exchange Commission ("SEC") brought these two suits to obtain injunctions preventing the defendants from committing future violations of the antifraud and reporting provisions of the federal securities laws. The district judge granted defendants' motions for summary judgment. The SEC appeals, contending that…