The Georgetown Law Journal
Mark J. Loewenstein, Section 14(e) of the Williams Act and the Rule 10b-5 Comparisons, 71 Geo. L.J. 1311 (1983), available at https://scholar.law.colorado.edu/faculty-articles/1056.
The passage of the Williams Act in 1968 added a set of provisions to the Securities Exchange Act of 1934 to govern tender offers. In this article, Professor Loewenstein examines the antifraud provision of the Williams Act, codified as section 14(e) of the Securities Exchange Act of 1934, and the development of decisional law under it. After discussing the propriety of inferring a private cause of action from section 14(e), Professor Loewenstein argues that the judiciary's reliance on rule 10b-5 precedents to set the bounds of the 14(e) cause of action is unwarranted. He concludes: 1) that scienter should not be an element of the section 14(e) action; 2) that section 14(e) plaintiffs should only be required to prove reliance if it is necessary to prove causation; 3) that a tender offeror should have standing to seek equitable relief if target management breaches its fiduciary duty to its shareholders and the breach interferes with the tender offer; and 4) that the SEC did not exceed its rulemaking authority in promulgating rule 14e-3 because section 14(e) is broad enough to support 14e-3's apparent prohibition of trading activities otherwise permissible under rule 10b-5.
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