SUPERINTENDENT OF INSURANCE V. BANKERS LIFE & CASUALTY CO.
404 U.S. 6 (1971)
NATURE OF THE CASE: This was a suit over an alleged fraud in the sale of securities under
section 17(a) of 1933 and section 10(b) of 1934.
FACTS: Bankers Life (D) agreed to sell all of Manhattan's (P) stock to Begole for
$5,000,000. Manhattan was now represented by the New York Superintendent of Insurance (P1).
It was alleged that Begole with a party named Bourne conspired to pay for this stock out of
P's assets. They arranged to get a $5,000,000 check from Irving Trust even though they had
no funds on deposit therein. On the same day they purchased the stock from D, they installed
Sweeny as president of P and then sold a treasury bond for $4,854,552.67. That plus cash on
hand in P covered the bad check. The trial court dismissed the complaint and the Court of
Appeals affirmed by a divided bench.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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