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SALINGER v. LING-TEMCO-VOUGHT
March 18, 1971
Harriet SALINGER, Trustee under the Will of Molly Steuer Shield, Deceased, on behalf of herself and on behalf of all other shareholders of Jones & Laughlin Steel Corporation similarly situated, Plaintiff,
LING-TEMCO-VOUGHT, INC., and Mellon National Bank and Trust Company, Defendants
Sorg, District Judge.
The opinion of the court was delivered by: SORG
Plaintiff's complaint in the above styled action asserts a claim for damages allegedly occasioned by delays in making payment for 357 shares of Jones & Laughlin Steel Corporation (J&L) common stock purchased from her by Ling-Temco-Vought, Inc. (LTV) and in furnishing a certificate for 143, the remainder of 500 J&L shares transmitted by her for sale to LTV. In support of her claim she invokes the following provisions of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. 78j(b) and Rule 10(b) of the Commission, 17 C.F.R. 240:
"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security."
Plaintiff also charges negligence in the handling of the transaction by Mellon National Bank and Trust Company (Mellon Bank), LTV's tender agent, pointing to a statement contained in LTV's offer, as follows: "Payment for shares tendered on or prior to June 6, 1968, will be made promptly thereafter."
The facts pleaded by the plaintiff, who, at all pertinent stages of the transaction complained of, acted through or was represented by competent legal and financial counsel, combined with uncontroverted affidavits filed on behalf of the defendants, clearly establish the following set of circumstances:
On February 7 and 8, 1968, the plaintiff acquired 500 shares of common stock of J&L at an average price of $51.62 per share. On May 14, 1968, she received an offer from LTV which reads, in pertinent part, as follows:
"To the Holders of Common Stock of Jones & Laughlin Steel Corporation:
Ling-Temco-Vought, Inc. offers to purchase from you and other holders of Common Stock of Jones & Laughlin Steel Corporation (the "Company"), all shares of such Common Stock (up to the limit hereinafter set forth) tendered in proper form at $85 per share net, in cash, under the terms set forth herein and in the Letter of Transmittal accompanying this offer. This offer will terminate at 5:00 P.M. New York City Time on June 6, 1968 unless extended. Payment for shares tendered on or prior to June 6, 1968 will be made promptly thereafter.
The price range of the Common Stock of the Company on the New York Stock Exchange for the 18-week period ended May 3, 1968 ...
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