Fed. Sec. L. Rep. P 97,226 Elliot Handler v. Securities and Exchange Commission

In this appeal, the plaintiffs, Elliot Handler, Ruth Handler, and Seymour Rosenberg, challenge the authority of the court in implementing a consent decree in which Mattel, Inc. agreed to appoint special counsel to investigate possible securities violation by Mattel and which required that the special counsel file with the court a report detailing his investigation. We find that the district court did not exceed its authority in allowing the appointment of the special counsel, and that the plaintiffs may not challenge the manner of the special counsel’s investigation because they failed to raise their objections in a timely manner. We, therefore, affirm the judgment of the district court dismissing the plaintiffs’ action for declaratory and injunctive relief.

During February 1973, Mattel released two inconsistent statements regarding its financial affairs. The SEC began a preliminary investigation of Mattel and in June 1973 met with Mattel officials to discuss the inconsistencies. Seven months later, the SEC began a formal investigation of Mattel. The SEC uncovered potential securities violations.

After negotiations, Mattel and the SEC agreed to settle the matter through a…