Meyer v. Oppenheimer Management Corp.
United States Court of Appeals for the Second Circuit
895 F.2d 861 (1990)
Pamela Meyer (plaintiff) was a shareholder in the Daily Cash Accumulation Fund, whose adviser, Centennial Capital Corporation, was 30 percent owned by Oppenheimer Management Corp. (defendant). In 1982, the fund's directors proposed changing its fee structure and issued a proxy statement to shareholders explaining the change. Around the same time, Oppenheimer was separately negotiating to sell its Centennial stake to another firm, but did not disclose this to the fund's directors or shareholders until after the sale closed. Meyer sued Oppenheimer and the fund's directors, arguing the undisclosed stock sale was a material omission from the proxy statement in violation of federal investment-company disclosure rules. The district court ruled for Oppenheimer, and Meyer appealed.
Whether the directors of an investment company have a duty to request information reasonably necessary to make an informed decision about a proposed fee structure, such that a related but undisclosed transaction becomes a material omission from a proxy statement.