35 F.R.D. 518 | S.D.N.Y. | 1964
This litigation arises out of the Ira Haupt & Co. disaster. An opinion in In the Matter of Ira Haupt & Co. is filed herewith 234 F.Supp. 167, and all that is stated herein assumes a familiarity with that opinion. At issue are motions to dismiss, pursuant to Fed.R.Civ.P. 12(b) (6), two complaints brought by limited partners of Haupt against the New York Stock Exchange and others.
The first complaint seeks to recover $2,100,000 as treble damages allegedly sustained by Haupt as a result of a violation of Section 1 of the Sherman Act (15 U.S.C. § 1). It alleges, in substance, that the Exchange and Stock Clearing Corporation notified each of its member organizations, on November 20, 1963, not to execute contracts with Haupt to buy or sell securities. The members complied with this notice. This action of the defendants is said to constitute a boycott of Haupt and a violation of the antitrust laws.
The defendants have moved to dismiss this complaint on the ground that the limited partners have no right under the New York Partnership Law, McKinney’s Consol.Laws, c. 39, derivative or otherwise, to assert a claim for damage to the partnership.
The second complaint contains two causes of action, both grounded on Section 6 of the Securities Exchange Act of 1934. The first is a derivative cause of action seeking damages on behalf of Haupt; the second is a personal cause of action in behalf of each plaintiff. The complaint alleges that the Exchange violated Section 6 by its failure to immediately suspend Haupt upon being informed that Haupt’s aggregate indebtedness exceeded 2000 per centum of net capital, a violation of the Exchange’s rules, causing Haupt to suffer losses in excess of $10,-000,000 and the individual plaintiffs losses in excess of $1,750,000.
The defendants have moved to dismiss this complaint on the grounds that Section 6 does not give these plaintiffs a private cause of action and, further, that limited partners cannot assert a claim in behalf of the partnership.
The motions to dismiss are denied without prejudice. They may be renewed upon the substantial completion of pretrial discovery.
It is so ordered.