Fed. Sec. L. Rep. P 98,827 Scientex Corporation v. Harry Kay

ScienTex Corporation (ScienTex) filed an action in the district court below seeking a mandatory injunction to require Harry Kay to comply with the provisions of the Securities Exchange Act of 1934 § 16(a), 15 U.S.C. § 78p(a). The court granted ScienTex’s motion for summary judgment and issued a permanent mandatory injunction directing Kay to file all statements required by section 16(a). Kay has appealed the judgment to this court. We granted his emergency motion for a stay of enforcement of the judgment pending appeal.

The sole issue raised on appeal is whether a private right of action for injunctive relief is properly implied under section 16(a). We hold that it is not.

I.

The following facts are not disputed. Kay was an officer or director of ScienTex, or a shareholder of more than ten percent of common stock in ScienTex, during the period from August, 1977 through December, 1980. Kay engaged in stock transactions involving ScienTex stock during this time period. According to ScienTex, these transactions should have been reported pursuant to section 16(a) for “virtually every thirty (30) day period” from August, 1977 through December, 1980. Kay filed only one such statement…