SEC v. Jos. Schlitz Brewing Company

452 F. Supp. 824 (E.D. Wis. 1978)

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Nature of the Case

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Facts

This is an action brought by P against D pursuant to section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b) and sections 21(d) and 21(e) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78u(d) and 78u(e), to restrain and enjoin D from engaging in practices alleged to violate the federal securities laws. D is a Wisconsin corporation engaged in the business of selling beer and malt beverages. P alleges violations of section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) and section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. 240.10b-5. P claims D failed to disclose a nationwide scheme to induce retailers to purchase D's products by making payments or furnishing things of value of at least $3 million in violation of federal, state and local liquor laws. P charged that D failed to disclose its alleged participation in violations of Spanish tax and exchange laws in connection with transactions with certain Spanish corporations described as affiliates. P alleged that D also falsified its books and records with respect to two violations. By failing to disclose these matters, D's financial statements, registration statements, periodic reports, and proxy solicitation materials are materially false and misleading. Schlitz is also charged with aiding and abetting violations of sections 17(a) and 10(b) by the public companies which allegedly received unlawful inducement payments. D moved to dismiss the charges.