U.S. Supreme Court ruled that Wharf Holdings violated federal sec...
U.S. Supreme Court ruled that Wharf Holdings violated federal securities law when it reneged on its oral pledge to grant stock option in its Hong Kong cable system to United International Holdings in 1992. In unanimous decision issued Mon.,…
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Supreme Court held that Wharf executives offered United option to acquire 10% of cable system’s stock in return for various services but never intended to carry out that promise. Upholding 2 lower court rulings, high court held that Sec. 10b of Securities Exchange Act of 1934 covered transaction, despite Wharf’s claims that law didn’t cover oral contracts and that decision favoring United would prompt other federal securities suits against it. In original case, jury awarded $67 million in compensatory damages and $58.5 million in punitive damages to United, Colo.-based cable operator that helped Wharf bid for Hong Kong system and raise $66 million in financing for it. Tenth U.S. Appeals Court, Denver, then upheld jury award but Supreme Court agreed to review case.