IN RE EQUITY FUNDING CORP. OF AMER. SEC. LITIGATION

M.D.L. No. 142.

416 F.Supp. 161 (1976)

In re EQUITY FUNDING CORPORATION OF AMERICA SECURITIES LITIGATION.

United States District Court, C. D. California.

January 23, 1976.


Attorney(s) appearing for the Case

Mitchell, Silberberg & Knupp, Los Angeles, Cal., defendants' Liaison Counsel and for Seidman and Seidman, and Robert L. Spencer.

Harold A. Abeles, Beverly Hills, Cal., for Julian S. H. Weiner.

Wyman, Bautzer, Rothman & Kuchel, Beverly Hills, Cal., for Daniel J. Disipio, Burton Borman, Stanley Beyer, Joe D. Bain, and G. Phillip Streatfield.

A. Tod Hindin, Hindin, McKay, Levine & Glick, Beverly Hills, Cal., for Dov Amir.

John A. Sturgeon, Sheppard, Mullin, Richter & Hampton, Los Angeles, Cal., for Wells Fargo Bank.

Gibson, Dunn & Crutcher, Los Angeles, Cal., for United California Bank, Peat, Marwick, Mitchell & Co., Pennsylvania Life Co., Pennsylvania Life Insurance Co., and Penn General Agencies, Inc.

Nelson, Liker & Merrifield, Los Angeles, Cal., for Wolfson, Weiner & Co., and Wolfson, Weiner, Ratoff & Lapin.

Stephens, Jones, La Fever & Smith, Los Angeles, Cal., for Arthur Young & Co.

Arthur C. DeGoede, Deputy Atty. Gen. for State of California and State of California Insurance Commissioner.

Nathan Markowitz, Los Angeles, Cal., for Solomon Block.

Howard P. Miller, Elihu M. Berle, Buchalter, Nemer, Fields & Savitch, Los Angeles, Cal., for Equity Funding Corp. of America.

William H. Levit, Jr., Hughes, Hubbard & Reed, Los Angeles, Cal., for Coopers & Lybrand, Philip L. Defliese, Joseph Froggatt & Co., and Joseph Froggatt & Co., Inc.

Simon & Sheridan, Los Angeles, Cal., for Marlene Goldblum.

Alfred I. Rothman, Albert F. Smith, Loeb & Loeb, Los Angeles, Cal., for Haskins & Sells and Lorin H. Wilson.

James L. Nolan, Adams, Duque & Hazeltine, Los Angeles, Cal., for Robert T. Jackson and Phoenix Mut. Life Ins. Co.

Richard A. DeSantis, Los Angeles, Cal., for Marvin A. Lichtig and Esther Lichtig.

Dryden, Harrington & Swartz, Los Angeles, Cal., for John S. Pennish.

Kadison, Pfaelzer, Woodard, Quinn & Rossi, Los Angeles, Cal., for Director of Insurance, Dept. of Insurance, State of Ill.

Fischmann & Wallerstein, Los Angeles, Cal., for Phillip J. Wolfson.

Donnelly, Clark, Chase & Johnson, Los Angeles, Cal., for American Stock Exchange.

David K. Robinson, Leonard M. Marangi, Hahn & Hahn, Pasadena, Cal., for Milliman & Robertson, Inc.

Burton Y. Weitzenfeld, John F. McClure, Arnstein, Gluck, Weitzenfeld & Minow, Chicago, Ill., for The Savings and Profit Sharing Fund of Sears Employees (and Trustees).

William Scott, Atty. Gen. of Ill., Robert J. O'Rourke, Chicago, Ill., for State of Ill.

Leonard Joseph, Dewey, Ballantine, Bushby, Palmer & Wood, George D. Reycraft, Peter M. Brown, Cadwalader, Wickersham & Taft, Donald I. Strauber, Chadbourne, Parke, Whiteside & Wolff, White & Case, Jerome Londin, Carro, Spandock, Londin, Rodman & Fass, Samuel E. Gates, Debevoise, Plimpton, Lyons & Gates, Peter Fleming Jr., Curtis, Mallet-Prevost, Colt & Mosle, Robert A. Meister, Milgrim Thomajan & Jacobs, P. C., New York City, for certain "trading" defendants.

Robert E. Kushner, Cole & Deitz, New York City, for National Bank of North America.

John J. Loflin, Lord, Day & Lord, New York City, for American Stock Exchange, Inc.

Jeffrey M. Epstein, Kaye, Scholer, Fierman, Hays & Handler, New York City, for Franklin Nat. Bank.

Bud G. Holman, Kelley, Drye & Warren, New York City, for Delafield Childs, Inc.

Sherman & Sterling, New York City, for First Nat. City Bank.

Milbank, Tweed, Hadley & McCloy, New York City, for New York Stock Exchange, Inc.

Marvin Schwartz, Sullivan & Cromwell, New York City, for L. Jay Tenenbaum, Bache & Co., Inc., Goldman, Sachs & Co., and New York Securities Co., Inc.

Allen W. Williams, Jr., Foley & Lardner, Milwaukee, Wis., for Estate of Lynford Lardner, Jr.

Raoul Y. Roth, Sherman Oaks, Cal., for William Mercado.

Edwin S. Kahn, Alan E. Boles, Holland & Hart, Denver, Colo., for Dean J. Boosalis, and Frank M. Zaveral, Jr.

Shoob & Zalut, Phoenix, Ariz., for Bernard D. Duskin.

John S. Martin, Martin, Obermaier & Morvillo, New York City, for Frank Flaum, Thomas F. Egan, George Mandel, Melvin Bund, Samuel B. Ratoff, Benjamin H. Lapin, Arthur M. Hartzband, and Saul Bruh.

Tom Watson Brown, Huie, Brown & Ide, Atlanta, Ga., for Leonard Bagen, J. Rodgers, Robert Gorin, and Pete Fishman.

Marshall B. Grossman, Schwartz, Alschuler & Grossman, Jack Corinblit, Corinblit & Shapero, Los Angeles, Cal., Herbert M. Wachtell, Wachtell, Lipton, Rosen & Katz, New York City, Wayne M. Thomas, Harold E. Kohn, Philadelphia, Pa., Stanley A. Furman, Feinerman, Furman & Klein, Beverly Hills, Cal., Allen D. Black, Fine, Kaplan & Black, Philadelphia, Pa., David B. Gold, San Francisco, Cal., John E. Martindale, Arter & Hadden, Cleveland, Ohio, Edmond H. Kerr, Cleary, Gottlieb, Steen & Hamilton, New York City, James F. Pascal, Everett G. Allen, Jr., Hirschler, Fleischer, Weinberg, Cox & Allen, Richmond, Va., James J. Wilson, Diamond, Tilem, Colden & Emery, Los Angeles, Cal., for plaintiffs.


LUCAS, District Judge.

Opinion on Motions Directed to Complaint

The occasion for this opinion is resolution of many defendants' motions directed to the sufficiency of the pleadings in this litigation. The litigation arises out of an alleged securities fraud perpetrated through Equity Funding Corporation of America (hereinafter "EFCA") and its subsidiaries.1 After more than eight years of public trading in EFCA securities...

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