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Keywords

compliance

Related Cases

S.E.C. v. Gulf & Western Industries, Inc., Not Reported in F.Supp., 1981 WL 1692, Fed. Sec. L. Rep. P 98,324

Facts

The case arose from a civil injunctive action initiated by the Commission on November 26, 1979, against G+W for violations of securities laws. The Agreement reached between G+W and the Commission stipulated that G+W, along with its subsidiaries and certain officers, would not violate specific sections of the Securities Act of 1933 and the Securities Exchange Act of 1934. Additionally, G+W agreed to maintain certain governance practices, including the establishment of an Audit Committee with a majority of unaffiliated directors and specific responsibilities regarding financial oversight.

Pursuant to the Agreement, it was stipulated and agreed that G + W, its subsidiaries, its officers and directors and certain others shall not violate Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13a-1 and 13a-13 thereunder.

Issue

The main legal issue was whether the Agreement between G+W and the Commission adequately addressed the violations of securities laws and ensured future compliance.

Rule

The court applied the principles of corporate governance and compliance with the Securities Act of 1933 and the Securities Exchange Act of 1934, particularly focusing on the requirements for the establishment and functioning of an Audit Committee.

Analysis

The court analyzed the stipulations in the Agreement, determining that they provided a comprehensive framework for G+W to adhere to securities laws and improve its corporate governance. The stipulations included maintaining an Audit Committee with specific powers and responsibilities, which the court found to be sufficient to prevent future violations and protect the interests of shareholders and the public.

The court analyzed the stipulations in the Agreement, determining that they provided a comprehensive framework for G+W to adhere to securities laws and improve its corporate governance.

Conclusion

The court concluded that the Agreement adequately resolved the issues raised by the Commission and terminated the action with prejudice, allowing G+W to move forward under the new compliance framework.

The court concluded that the Agreement adequately resolved the issues raised by the Commission and terminated the action with prejudice.

Who won?

The prevailing party in this case was Gulf + Western Industries, Inc. (G+W), as the court approved the Agreement that resolved the Commission's action against them, allowing them to continue operations under stipulated compliance measures.

The prevailing party in this case was Gulf + Western Industries, Inc. (G+W), as the court approved the Agreement that resolved the Commission's action against them.

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