According the L.A. Times this morning, Jim and Johnny Buss tried to take over the Lakers and “oust [Jeannie Buss] as the Lakers’ president and controlling owner.”   Jeannie Buss responded by asking the court to issue a restraining order stopping the effort and that apparently was successful.

According to the article,

Jeanie Buss [had] removed Jim Buss from his role as Lakers vice president of basketball operations and hired Magic Johnson.  Three days later, according to court documents, Johnny Buss notified his sister of a March 7 meeting to elect the team’s board of directors.  He is listed as overseeing corporate development of the Lakers.

The brothers proposed four directors, according to court records, but didn’t include her.  In order to be the controlling owner, she also must be a director.

The family trusts that own 66% of the Lakers can elect three of the board’s five members.  The trusts mandate the co-trustees — Johnny, Jim and Jeanie — take all actions to ensure Jeanie Buss remains controlling owner of the Lakers.  She has occupied the role since their father, Jerry Buss, died in 2013.

Pretty fun.  So let’s put all of this in the terms we talk about in class.   The first thing we need to know is whether this is a corporation.  I went to the business search function of the California Secretary of State and found a corporation “The Los Angeles Lakers, Inc.” formed in 1979.  The form SI indicates that Jeannie Buss is the President and there are five board members:  Jeannie, Joey and Johnny plus two other persons whose names aren’t Buss.  No Jim. Continue reading →

I mentioned a few times during the semester that the Supreme Court was considering an insider trading case this term.  They issued their opinion today in Salman v. United States.  It was an 8-0 decision with Alito writing the opinion.  The opinion is not long and lays out very nicely how insider trading works – at least as to tippees!

It seems a guy named Maher Kara “was an investment banker in Citigroup’s healthcare investment banking group.”  He is the source of the inside info.  It is info about corporations looking for mergers or acquisitions, thus hiring investment bankers.  He gave his older brother Michael the inside info – apparently bunches of times – because he and his brother were very close.  Michael used the info to trade in the securities of Maher’s clients.  Michael (not Maher) gave the inside info to Salman (the defendant) who also traded on it.  Salman was Maher’s brother-in-law and was apparently also close to Michael.  The SEC went after Maher, Michael and Salman under Rule 10b(5).  Maher and Michael basically confessed but Salman fought the criminal charges.  The SEC said that Maher was the “certain person,” and Michael and Salman were tippees.   Continue reading →

This is from the Georgetown Supreme Court Institute.   It is a preview of cases on the Supreme Court docket for the upcoming term.  One of the cases fits into our study of a part of Rule 10b-5 known as insider trading,

Insider Trading Liability

Salman v. United States

Section 10(b) of Securities Exchange Act of 1934, and the SEC’s implementing Rule 10b-5, broadly prohibit deceptive or fraudulent acts in connection with trading securities.  For over 35 years, the Court has recognized insider trading as a Continue reading →