Sec. and Exch. Comm’n v. Shanahan, Jr.

The SEC brought a civil action against defendant alleging that, as an outside director of Engineered Support Systems, Inc. (ESSI), he violated numerous federal securities laws by participating in the grant of backdated, "in-the-money" stock options to ESSI officials including his father. At issue was the district court's grant of defendant's Fed. R. Civ. Pro. 50(a)(1) motion for judgment as a matter of law. The court agreed with the district court's conclusion that the SEC had failed to prove the requisite elements of scienter and negligence. The court also held that there was no clear abuse of discretion in excluding any reference to the Incentive Stock Option Agreement between defendant's father and ESSI. Accordingly, the court affirmed the judgment of the district court. View "Sec. and Exch. Comm'n v. Shanahan, Jr." on Justia Law