Palumbo v. Electric Bond & Share Co.

RIFKIND, District Judge.

Defendants moved to reargue the denial of their motion for a stay of the action; and the Securities and Exchange Commission moved for leave to intervene as a party, and for a stay of the action pending the determination of certain proceedings now in progress before the Commission.

Such reargument having been granted and had, it appeared, from the moving papers submitted by the Commission, that I had been led into error concerning the character and scope of the Commission’s proceedings. It is now clear that those proceedings, begun on May 31, 1941, necessarily entail a disposition of the issues of the action, at least as against the defendant, Electric Bond & Share Co., which is charged with primary liability and which is financially able to respond (see page 9 of S.E.C. Release #2790, being the order of May 31, 1941, and page 12, item 21 thereof). The action was commenced more than a year after the proceedings were instituted. These circumstances require a reversal of the previous disposition, in accordance with Dederick v. North America Co., D.C. S.D.N.Y., 1943, 48 F.Supp. 410 and Illinois Iowa Power Co. v. North American Light & Power Co., D.C. Del., 1943, 49 F.Supp. 277.

The application for a stay of the action, pending the determination of the mentioned proceedings before the Securities and Exchange Commission, is granted.

The application of the Commission for leave to intervene is granted but only to the extent of making this motion; and otherwise it is denied without prejudice to a renewal of the application upon a showing of circumstances warranting the granting thereof.

Settle order.