Dist. Ct. did not err in dismissing for failure to state viable cause of action plaintiff’s action under sections 10(b) and 14(e) of Securities Exchange Act, where defendant, in conducting “Dutch auction” to buy back some of its own stock, initially announced at 8:00 a.m. that it would buy back its stock at $105 per share, but then announced after close of day and after its stock was priced at $103 that it would buy back its stock at $103. Record showed that defendant said in its initial announcement that $105 purchase price was subject to change, and thus defendant did not make “false” statement for purposes of imposing liability under section 10(b). Also, plaintiff could not seek relief under section 14(e), where plaintiff failed to allege that it relied on defendant’s statements. Moreover, investor cannot use section 14(b) to challenge statement made after tender offer has closed.
Federal 7th Circuit Court
Civil Court
Securities Exchange Act