Securities and Exchange Commission v. First City Financial Corp., Ltd.
United States Court of Appeals for the District of Columbia Circuit
890 F.2d 1215 (1989)
First City vice-president Belzberg arranged a stock purchase of Ashland Oil shares through Bear Stearns, which then transferred the shares to First City (defendant) at a price below what Bear Stearns paid, in what was Bear Stearns' first transaction with First City; the SEC (plaintiff) sued, alleging First City failed to register under Exchange Act Section 13(d)'s requirement for holders of 5% or more of a company's shares, and First City argued the purchase was intended for Belzberg personally, not the company. The district court ordered disgorgement of profits from the transaction.
Whether disgorgement of profits is a proper remedy for a violation of Securities Exchange Act Section 13(d), where the profits from the violation can be distinguished from other profits.