(Download) "Pearlstein v. Scudder & German" by United States Court of Appeals for the Second Circuit " Book PDF Kindle ePub Free
eBook details
- Title: Pearlstein v. Scudder & German
- Author : United States Court of Appeals for the Second Circuit
- Release Date : January 02, 1970
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 76 KB
Description
WATERMAN, Circuit Judge: Appellant Stanley S. Pearlstein, the plaintiff below, sued Scudder & German, a partnership engaged in the securities business, for damages which he alleged he suffered because the defendant had violated the margin and antifraud provisions of the federal securities laws.1 Plaintiff's allegations grew out of two distinct purchases of bonds he bought through the defendant, who acted as his broker. Although these transactions overlapped in time they can best be described separately. The first of these, which can be termed the ""Lionel transaction,"" began on March 6, 1961, when plaintiff bought fifty convertible bonds of the Lionel Corporation for a total price of $59,625.41 despite defendant's advice against the purchase. Plaintiff financed this purchase partly through a bank loan of $48,000 arranged by the defendant against the bonds and partly through a payment to defendant of $4,598.53 in cash. These two payments fell short of the purchase price by $7,026.88, however, and plaintiff continued to owe this balance to the defendant. Under Federal Reserve System Regulations2 the payment of this sum was due on March 15, 1961, seven business days after the date of purchase. Plaintiff did not pay any portion of this balance by that day. As payment had been delayed beyond the permissible time, defendant was obligated by law to sell the bonds on plaintiff's account. However, defendant made no such sale but, instead, on April 5, transferred the bonds to the lending bank as security for its loan and did not even demand of the plaintiff payment of the balance due until June 8. Finally, on August 7, plaintiff was served with a summons in a suit instituted by defendant to collect this sum.
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