Fed. Sec. L. Rep. P 98,224 Mary E. Little v. The Valley National Bank of Arizona, a National Banking Association

This is a class action brought by some five hundred investors who purchased debentures of the United States National Bank (USNB) from First California Company (FCC), a brokerage house. Both USNB and FCC are now defunct. The plaintiffs brought suit against C. Arnholt Smith, president of USNB; Michael Coen, president of FCC; FCC; and Valley National Bank of Phoenix (VNB). The liability of all four defendants was predicated on violations of section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240 .10b-5 (1976); section 17 of the Securities Act of 1933, 15 U.S.C. § 77q; regulations of the Comptroller of the Currency, 12 C.F.R. §§ 16.1-16.6 (1976); and the Arizona blue sky laws, Ariz.Rev. Stat.Ann. §§ 44-1991, -2003.

The suit against C. Arnholt Smith was severed. The court granted judgment against FCC and Coen on stipulated facts. The suit against VNB went to trial, and the plaintiff class secured a jury verdict in the amount of $4 million. VNB appealed, challenging the sufficiency of the evidence to support the jury’s verdict. None of the other defendants is involved in this appeal.

The plaintiffs claim that they were induced to buy…