CORPORATIONS-SECURITIES ACT OF 1933--SALE OF SHARES TO EMPLOYEES AS NOT INVOLVING A PUBLIC OFFERING

As it had done in the nine preceding years defendant corporation sought to win the loyalty of its key employees by offering for their direct purchase some 10,000 shares of its common stock at a price comparing favorably with that in the market. Plaintiff commission sought to enjoin the sale in the federal district court under §77(e) of the Securities Act of 1933 which prohibits sales by mail or interstate commerce of securities not registered with plaintiff. The defense was that §77(d)(1) exempted the sale from registration as one not involving a public offering. Held, judgment for the defendant. This is not an offering of shares to the public but merely a sensible way of improving the employer-employee relationship. Securities & Exchange Commission v. Ralston Purina Co., (D.C. Mo. 1952) 102 F. Supp. 964