The opinion of the court was delivered by: LOUIS L. STANTON
Plaintiff Richard Gray, a shareholder in The Furia Organization ("Furia"), sues Furia and its officers and directors under section 13(a) of the Securities Exchange Act of 1934 to compel Furia to file certain reports with the Securities and Exchange Commission. He also asserts claims under state law for conversion and breach of fiduciary duty.
Both Gray and the defendants move pursuant to Fed. R. Civ. P. 56 for summary judgment on Gray's federal securities law claim. Defendants argue that: (1) there is no private right of action under section 13(a), and (2) if that claim is dismissed, this court does not have subject-matter jurisdiction over Gray's state-law claims. Gray also moves for summary judgment on his claim for breach of fiduciary duty.
Before the events involved in this litigation, Gray was Furia's majority shareholder and served as president and director of the company. In December 1993, a wholly-owned subsidiary of Furia merged with Madison Fashions, Inc. on terms which resulted in Madison's shareholders and others than Gray becoming the owners of approximately 83% of Furia's common stock. After the merger, Gray, who no longer controlled Furia, resigned as president and director. Furia disclosed the merger in a Form 8-K dated December 29, 1993, which was filed with the SEC.
Since the merger, Furia has not filed any annual or quarterly reports with the Securities and Exchange Commission.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The court "must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Consarc Corp. v. Marine Midland Bank, 996 F.2d 568, 572 (2nd Cir. 1993).
A. Private Right of Action Under Section 13(a)
Section 13(a) of the Securities Exchange Act of 1934 (the "Act"), 15 U.S.C. § 78m(a), provides:
(1) such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an application or registration statement. . . . [and]
(2) such annual reports (and such copies thereof) . . . and such quarterly reports (and such copies thereof), as the Commission may prescribe.
Under 17 C.F.R. § 240.13a-1 (1995), issuers of securities registered pursuant to section 12 of the Act are required to file an annual report on a prescribed form. Such issuers are also required to file ...