Securities and Exchange Commission v. Jos. Schlitz Brewing Co.
United States District Court for the Eastern District of Wisconsin
452 F. Supp. 824 (E.D. Wis. 1978)
Schlitz (defendant) paid over $3,000,000 in undisclosed kickbacks to retailers to boost sales, continuing the practice even after an SEC warning to stop, and separately failed to disclose violations of Spanish tax law along with falsified records related to those transactions; the SEC (plaintiff) alleged these omissions rendered Schlitz's financial statements, registration statements, reports, and proxy materials materially misleading, and Schlitz moved for summary judgment.
Whether potentially illegal activities are material information requiring disclosure under securities laws if there is a substantial likelihood a reasonable investor would attach importance to them in making investment decisions.