Fed. Sec. L. Rep. P 97,113 Carolyn O. Goldman v. Northrop Corp., Nominal Ernst and Ernst, R. P. Colley, Thomas J. Jones

On April 21, 1975, appellant Goldman, a shareholder in Northrop Corporation, brought this shareholders’ derivative action in the Central District of California. The action was brought on behalf of Northrop, which was made a nominal defendant. The complaint alleged that the individual defendants, officers and directors of Northrop, had secretly converted and wasted corporate funds for illegal purposes believed to include the making of “bribes to foreign governments, payoffs to certain individuals * * * and unreported and illegal fees and sales commissions * * Violations of the Securities Exchange Act, 15 U.S.C. § 78m, and the Federal Election Campaign Act, 18 U.S.C. § 610 , were charged.

A year earlier the case of Springer v. Jones, also a shareholders’ derivative action, had been brought against certain officer-directors. The complaint charged these officer-directors with making allegedly improper corporate expenditures in the name of Northrop. Judgment was entered pursuant to stipulation of settlement. Judge Warren Ferguson of the Central District of California presided throughout. When the complaint in the present action was filed, it also was assigned to Judge Ferguson. The…