Broker-Dealer Litigation - Greenberg Traurig LLP

Exchange Act by making materially false and misleading statements regarding his ability to
secure financing and close the proposed deals with Kodak and AMR. Further, the SEC alleged
that Weintraub made materially false and misleading statements regarding his own background.
The SEC requested that the court permanently restrain and enjoin the defendants from violating
sections 10(b) and 14(e) and the rules thereunder.
In granting summary judgment on the Section 14(e) claim, the court determined that,
while the offer letters were not formal tender offers, the letters were pre-commencement
communications that fall under the purview of Rule 14e-8. Accordingly, Weintraub’s tender
offer letters and material misstatements regarding his ability to complete the proposed
transactions and his background violate the antifraud provisions of both Section 14(e) of the
Securities and Exchange Act and Rule 14e-8.
In re Sam P. Douglass and Anthony R. Moore, Securities and Exchange Commission,
Administrative Proceeding File No. 3-13934 (Feb. 24, 2011).
The Commission filed an administrative proceeding against Douglass, formerly
Chairman and CEO of Equus, a business development company, alleging misleading disclosures
regarding officer compensation in proxy statements in 2005 and 2006, and in quarterly and other
filings with the Commission. In 2005, Equus made a proxy solicitation for approval of a change
in investment adviser and fund administrator. The Commission alleged that in connection with
the 2005 proxy solicitation, Douglass had stated in a press release that the purchase price for
shares issued upon exercise of options held by officers and directors would not exceed the
current market price for shares, when an agreement had already been negotiated which would
compensate a senior vice president for his shares at a premium above market price. The
Commission alleged that in 2006, Equus’s annual proxy statement omitted to disclose more than
$460,000 which had been paid to the senior vice president as a consulting fee to the new
administrator in connection with the change in investment adviser and manager, and as a
retention bonus. Because of this and other conduct alleged, the Commission found that Douglass
had violated Section 14(a) of the Exchange Act, and Rules 13b2-1, 13b2-2, and 14a-9
thereunder, as well as causing violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act, and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder, and Section 206(2) of
the Investment Advisers Act.
Without admitting or denying the findings, Douglass consented to the entry of an order
(1) requiring him to cease and desist the above mentioned provisions of the securities laws, (2)
censuring him, and (3) requiring him to pay a $25,000 penalty.
C.2
108