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430 U.S. 1 

  Rehearings Denied April 18, 1977. See 430 U.S. 976, 97 S.Ct. 1668.

          Respondent Chris-Craft Industries was the unsuccessful tender offeror in a contest for the control of a corporation. During the course of the takeover contest, Chris-Craft brought suit for damages and injunctive relief against the management of the target corporation, its investment adviser, and Bangor Punta Corp., the successful competitor, alleging, inter alia, violations of § 14(e) and other provisions of the Securities Exchange Act of 1934, and Rule 10b-6 of the Securities and Exchange Commission. Section 14(e) makes unlawful "any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer . . . or any solicitation of security holders in opposition to or in favor of any such offer . . . ." Rule 10b-6 prohibits issuers whose stock is in the process of distribution from market tampering by purchasing stock or stock rights until the distribution has been completed. After protracted litigation, the Court of Appeals ultimately held that Chris-Craft had standing to sue for damages under § 14(e) and Rule 10b-6 and that a claim for damages had been established. The court stated that it would not infer from the silence of the statute that Congress intended to deny a federal remedy as a "means of furthering the general

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objective of § 14(e). . . ." On the merits the court found violations of § 14(e) by all the defendants and violations of Rule 10b-6 by the successful competitor. The court then remanded for a determination of the amount of damages and instructed the District Court to enjoin the successful competitor for at least five years from voting the target company's shares acquired through violation of § 14(e) and Rule 10b-6. Held:

          1. A tender offeror, suing in its capacity as a takeover bidder, does not have standing to sue for damages under § 14(e); hence, the Court of Appeals erred in holding that Chris-Craft, as a defeated tender offeror, had an implied cause of action for damages under that provision. Pp. 24-42.

          (a) The legislative history shows that the sole purpose of § 14(e) was the protection of investors who are confronted with a tender offer. Congress was intent on regulating takeover bidders, who had previously operated covertly, in order to protect shareholders of target companies; tender offerors, the class regulated by the statute, were not the intended beneficiaries of the legislation. Pp. 26-37.

          (b) The creation of an implied cause of action for damages by judicial interpretation, such as is urged by Chris-Craft, is not necessary to effectuate Congress' objectives in enacting § 14(e). This conclusion is confirmed by the four factors identified Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26, as "relevant" in determining whether a private remedy is implicit in a statute not expressly providing one: (i) Chris-Craft, a member of the class whose activities Congress intended to regulate for the benefit of target shareholders, was not " 'one of the class for whose especial benefit (§ 14(e)) was enacted . . .' "; (ii) although nothing in the legislative history manifests an intent to deny a damages remedy to tender offerors, there is no material showing an intention to create such a remedy, and the pervasive legislative history negates any claim that the statute was intended to provide tender offerors with additional weapons in contests for control; (iii) it is not consistent with the underlying legislative purpose to imply a damages remedy for the tender offeror in a statute especially designed to protect shareholders of target corporations, particularly where the damages award (here $36 million to Chris-Craft) favors the tender offeror, not the "injured" shareholders of the target; and (iv) the cause of action by a tender offeror is one appropriately "relegated to state law," to the extent that the offeror seeks damages for loss of an opportunity to control a corporation. Pp. 37-41.

          2. In the context of this case, Chris-Craft has no standing to sue for damages on account of the asserted Rule 10b-6 violations by the

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successful competitor, since Chris-Craft's complaint is not that the price paid for the target company's shares was influenced by the Rule 10b-6 violations, but that the opportunity to gain control of the target company was lost by virtue of those violations. Thus, Chris-Craft's complaint does not implicate the concerns of Rule 10b-6, which is aimed at maintaining an orderly market for the distribution of securities from manipulative influences. Pp. 42-46.

          3. The Court of Appeals erred under the circumstances presented here in awarding Chris-Craft injunctive relief. The case was tried in the District Court exclusively as a suit for damages after Chris-Craft expressly waived any claim to injunctive relief. Under these circumstances, this Court's holding that Chris-Craft has no cause of action for damages under either § 14(e) or Rule 10b-6 renders the injunction granted by the District Court inappropriate, premised as it was upon the impermissible award of damages. Pp. 47-48.

          516 F.2d 172, reversed.

          Lloyd N. Cutler, Washington, D. C., for petitioners in No. 75-355.

          David W. Peck, New York City, for petitioner in No. 75-354.

          Paul G. Pennoyer, Jr., New York City, for petitioners in No. 75-353.

          Arthur L. Liman, New York City, for respondents in each case.

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           Mr. Chief Justice BURGER delivered the opinion of the Court.

          We granted certiorari in these cases, 425 U.S. 910, 96 S.Ct. 1505, 47 L.Ed.2d 760 (1976), to consider, among other issues, whether an unsuccessful tender offeror in a contest for control of a corporation has an implied cause of action for damages under § 14(e) of the Securities Exchange Act of 1934, as added by § 3 of the Williams Act of 1968, 82 Stat. 457, 15 U.S.C. § 78n(e), or under Securities and Exchange Commission (SEC) Rule 10b-6, 17 CFR § 240.10b-6 (1976), based on alleged antifraud violations by the successful competitor, its investment adviser, and individuals constituting the management of the target corporation.

          The factual background of this complex contest for control, including the protracted litigation culminating in the cases now before us, is essential to a full understanding of the contending parties' claims.

          The three petitions present questions of first impression, arising out of a "sophisticated and hard fought contest" for control of Piper Aircraft Corp., a Pennsylvania-based manufacturer of light aircraft. Piper's management consisted principally of members of the Piper family, who owned 31% of Piper's outstanding stock. Chris-Craft Industries, Inc., a diversified manufacturer of recreational products, attempted to secure voting control of Piper through cash and exchange tender offers for Piper common stock. Chris-Craft's takeover attempt failed, and Bangor Punta Corp. (Bangor or Bangor Punta), with the support of the Piper family, obtained control of Piper in September 1969. Chris-Craft brought suit under § 14(e) of the Securities Exchange Act of 1934 and Rule 10b-6, alleging that Bangor Punta achieved control of the target corporation as a result of violations of the federal securities laws by the Piper family, Bangor Punta, and Bangor Punta's

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underwriter, First Boston Corp., who together had successfully repelled Chris-Craft's takeover attempt.

          The struggle for control of Piper began in December 1968. At that time, Chris-Craft began making cash purchases of Piper common stock. By January 22, 1969, Chris-Craft had acquired 203,700 shares, or approximately 13% of Piper's 1,644,790 outstanding shares. On the next day, following unsuccessful preliminary overtures to Piper by Chris-Craft's president, Herbert Siegel, Chris-Craft publicly announced a cash tender offer for up to 300,000 Piper shares ¹ at $65 per share, which was approximately $12 above the then-current market price. Responding promptly to Chris-Craft's bid, Piper's management met on the same day with the company's investment banker, First Boston, and other advisers. On January 24, the Piper family decided to oppose Chris-Craft's tender offer. As part of its resistance to Chris-Craft's take-over campaign, Piper management sent several letters to the company's stockholders during January 25-27, arguing against acceptance of Chris-Craft's offer. On January 27, a letter to shareholders from W. T. Piper, Jr., president of the company, stated that the Piper Board "has carefully studied this offer and is convinced that it is inadequate and not in the best interests of Piper's shareholders."

          In addition to communicating with shareholders, Piper entered into an agreement with Grumman Aircraft Corp. on January 29, whereby Grumman agreed to purchase 300,000 authorized but unissued Piper shares at $65 per share. The agreement increased the amount of stock necessary for Chris-Craft to secure control and thus rendered Piper less vulnerable to Chris-Craft's attack. A Piper press release and letter to shareholders announced the Grumman transaction but failed to state either that Grumman had a "put" or option to sell the shares back to Piper at cost, plus interest, or that

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Piper was required to maintain the proceeds of the transaction in a separate fund free from liens.

          Despite Piper's opposition, Chris-Craft succeeded in acquiring 304,606 shares by the time its cash tender offer expired on February 3. To obtain the additional 17% of Piper stock needed for control, Chris-Craft decided to make an exchange offer of Chris-Craft securities for Piper stock. Although Chris-Craft filed a registration statement and preliminary prospectus with the SEC in late February 1969, the exchange offer did not go into effect until May 15, 1969.

          In the meantime, Chris-Craft made cash purchases of Piper stock on the open market until Mr. Siegel, the company's president, was expressly warned by SEC officials that such purchases, when made during the pendency of an exchange offer, violated SEC Rule 10b-6.² At Mr. Siegel's direction, Chris-Craft immediately complied with the SEC's directive and canceled all outstanding orders for purchases of Piper stock.

          While Chris-Craft's exchange offer was in registration, Piper in March 1969 terminated the agreement with Grum-

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man and entered into negotiations with Bangor Punta. Bangor had initially been contacted by First Boston about the possibility of a Piper takeover in the wake of Chris-Craft's initial cash tender offer in January. With Grumman out of the picture, the Piper family agreed on May 8, 1969, to exchange their 31% stockholdings in Piper for Bangor Punta securities. Bangor also agreed to use its best efforts to achieve control of Piper by means of an exchange offer of Bangor securities for Piper common stock. A press release issued the same day announced the terms of the agreement, including a provision that the forthcoming exchange offer would involve Bangor securities to be valued, in the judgment of First Boston, "at not less than $80 per Piper share." ³

          While awaiting the effective date of its exchange offer, Bangor in mid-May 1969 purchased 120,200 shares of Piper stock in privately negotiated, off-exchange transactions from three large institutional investors. All threepurchases were made after the SEC's issuance of a release on May 5 announcing proposed Rule 10b-13, a provision which, upon becoming effective in November 1969, would expressly prohibit a tender offeror from making purchases of the target company's stock during the pendency of an exchange offer. The SEC release stated that the proposed rule was "in effect, a codification of existing interpretations under Rule 10b-6," ⁴ the provision invoked by SEC officials against Mr. Siegel of Chris-Craft a month earlier. Bangor officials, although aware of the release at the time of the three off-exchange pur-

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chases, made no attempt to secure an exemption for the transactions from the SEC, as provided by Rule 10b-6(f). The SEC, however, took no action concerning these purchases as it had with respect to Chris-Craft's open-market transactions.

          With these three block purchases, amounting to 7% of Piper stock, Bangor Punta in mid-May took the lead in the takeover contest. The contest then centered upon the competing exchange offers. Chris-Craft's first exchange offer, which began in mid-May 1969, failed to produce tenders of the specified minimum number of Piper shares (80,000). Meanwhile, Bangor Punta's exchange offer, which had been announced on May 8, became effective on July 18. The registration materials which Bangor filed with the SEC in connection with the exchange offer included financial statements, reviewed by First Boston, representing that one of Bangor's subsidiaries, the Bangor & Aroostock Railroad (BAR), had a value of $18.4 million. This valuation was based upon a 1965 appraisal by investment bankers after a proposed sale of the BAR failed to materialize. The financial statements did not indicate that Bangor was considering the sale of the BAR or that an offer to purchase the railroad for $5 million had been received.⁵

          In the final phase of the see-saw of competing offers, Chris-Craft modified the terms of its previously unsuccessful exchange offer to make it more attractive. The revised offer succeeded in attracting 112,089 additional Piper shares, while Bangor's exchange offer, which terminated on July 29, resulted in the tendering of 110,802 shares. By August 4, 1969, at the conclusion of both offers, Bangor Punta owned a total of 44.5%, while Chris-Craft owned 40.6% of Piper stock. The remainder of Piper stock, 14.9%, remained in the hands of the public.

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          After completion of their respective exchange offers, both companies renewed market purchases of Piper stock,⁶ but Chris-Craft, after purchasing 29,200 shares for cash in mid-August, withdrew from competition.⁷ Bangor Punta continued making cash purchases until September 5, by which time it had acquired a majority interest in Piper. The final tally in the nine-month takeover battle showed that Bangor Punta held over 50% and Chris-Craft held 42% of Piper stock.

          Before either side had achieved control, the contest moved from the marketplace to the courts. Then began more than seven years of complex litigation growing out of the contest for control of Piper Aircraft.

          Chris-Craft's Initial Suit

          On May 22, 1969, Chris-Craft filed suit seeking both damages and injunctive relief in the United States District Court for the Southern District of New York. Chris-Craft alleged that Bangor's block purchases of 120,200 Piper shares in mid-May violated Rule 10b-6 and that Bangor's May 8 press release, announcing an $80 valuation of Bangor securities to be offered in the forthcoming exchange offer, violated SEC "gun-jumping" provisions, 15 U.S.C. § 77e(c), and

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SEC Rule 135, 17 CFR § 230.135 (1976). Chris-Craft sought to enjoin Bangor from voting the Piper shares purchased in violation of Rule 10b-6 and from accepting any shares tendered by Piper stockholders pursuant to the exchange offer.

            District Court Decision on Preliminary Injunction

          On July 22, 1969, Chris-Craft moved for a preliminary injunction against Bangor. In an opinion filed August 19, 1969, United States District Judge Charles Tenney denied relief. Judge Tenney concluded, first, that the May 8 press release had not violated the gun-jumping provisions, and, second, that Bangor's block purchases of Piper stock were not inconsistent with Rule 10b-6.

          "Bangor Punta's cash purchases . . ., effected neither on the Exchange nor from or through a broker or dealer, were obviously not designed to place market pressures on the distribution price of Piper, so as to create an artificially high price for this security." 303 F.Supp. 191, 198. (Emphasis supplied.) ⁸

          Judge Tenney, accordingly, concluded that neither irreparable injury nor likelihood of probable success on the merits had been established, particularly since the contest for control was still open.

          "(B)oth the Chris-Craft and Bangor Punta exchange offers have expired. Neither party has gained control of Piper, and both are still in a position to do so." Id., at 199.

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        Court of Appeals' Decision on Preliminary Injunction

          On appeal, the Court of Appeals for the Second Circuit, sitting en banc, affirmed Judge Tenney's denial of injunctive relief. 426 F.2d 569 (1970). In an opinion by Judge Waterman, the court held that Bangor had properly been allowed to continue soliciting Piper stock.

          "Chris-Craft was free (at time of the District Court's decision) to compete equally with Bangor Punta for the remaining Piper shares, and it did so. We do not understand Chris-Craft to allege that prior misdeeds of Bangor Punta so determined the course of the competition . . . that Chris-Craft was placed at any real disadvantage." Id., at 573.

          The court concluded, however, that Bangor had violated SEC "gun-jumping" provisions and Rule 10b-6, unless the three block purchases fell within an established exemption to the Rule.⁹

          Chief Judge Lumbard in dissent agreed that injunctive relief was unwarranted, but also accepted the District Court's determination that Bangor had not violated the securities laws.¹⁰ Id., at 579.

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          The Court of Appeals remanded the case for further proceedings, so that Bangor, among other things, could attempt to establish that its block purchases fell within an exemption to Rule 10b-6.

          While Chris-Craft's private suit was pending, the SEC sought an injunction against Bangor on account of the BAR omission in Bangor's registration statement. The Commission sought both an offer of rescission to Piper shareholders who accepted Bangor's exchange offer and an injunction against Bangor from violating the Securities Act of 1933 and the 1934 Act.

          In an opinion by Judge Pollack, the District Court concluded that Bangor's registration statement was unintentionally misleading by virtue of the failure to disclose the fact that an offer had been received for the sale of the BAR. Accordingly, the court required Bangor to offer rescission to tendering Piper shareholders; however, the District Court refused to grant an injunction against future violations of the securities laws on the ground that the SEC had failed to establish that Bangor and its officials had a "propensity or natural inclination to violate the securities law." SEC v. Bangor Punta Corp., 331 F.Supp. 1154, 1163 (1971).

          On remand from the Court of Appeals, Chris-Craft's private action also came before Judge Pollack. Although its second amended complaint, which added a claim based on the BAR omission, sought both damages and injunctive relief, Chris-Craft at a partial hearing expressly abandoned its

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prayer for equitable relief; the case was thereafter treated solely as an action for damages. 337 F.Supp. 1128, 1136 n. 8.

          Following trial before the District Court without a jury, Judge Pollack in December 1971 dismissed Chris-Craft's complaint against all defendants. In an exhaustive opinion, he concluded that Chris-Craft had standing to seek damages for Bangor's Rule 10b-6 violations, 337 F.Supp., at 1133, but found it unnecessary to decide whether § 14(e) could be invoked by one competitor for corporate control against another. 337 F.Supp., at 1134.¹¹

          On the merits, the District Court held that the Piper communications characterizing Chris-Craft's cash tender offer as "inadequate" were not misleading. The court concluded that the "more rational" view was that the statements referred to factors other than price, such as Piper's views as to the quality of Chris-Craft's management. Id., at 1135. The court also rejected Chris-Craft's contention that it had been injured by the omission in the Grumman press release concerning the "put" or option provision in the agreement. The District Court concluded that Piper's complete description of the provision in a listing application with the New York Stock Exchange, coupled with Chris-Craft's major acquisitions of Piper stock after learning of the "put," undermined Chris-Craft's claim that it was misled or otherwise injured by the announcement of the Grumman transaction. Ibid.

          With respect to the May 8 press release, which the Court of Appeals had held violative of the "gun-jumping" rules, the District Court held that the release, although technically a violation, was not false or misleading. Moreover, Chris-Craft had failed to show that it was injured or disadvantaged by the release in its efforts to acquire Piper stock. Id., at 1137.

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          As to the claim of a misleading valuation of the BAR, Judge Pollack held that Chris-Craft failed to show either scienter or causation as required in a damages action under the 1934 Act's antifraud provisions. Scienter was not established, the court concluded, since the BAR omission was "mere negligent omission or misstatement of fact." Id., at 1140. As to causation, the District Court specifically distinguished this Court's decision Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970), which established a presumption of causation in a § 14(a) suit by minority shareholders challenging misleading proxy materials. The omission in the proxy statement in that case, the District Court reasoned, directly affected the shareholders on whose behalf the suit was brought:

          "It was in that particular context that the Supreme Court deemed sufficient a set of facts under which shareholders could be misled. This does not aid Chris-Craft as it is seeking to recover because of the effect which a misstatement allegedly had on third parties." 337 F.Supp., at 1139. (Emphasis in original.) (Footnote omitted.)

          Given the differences between the instant case and Mills, the District Court went on to hold that proof of actual causation was required:

          "There is no proof that a single exchanging Piper shareholder would have refrained from the exchange and taken an offer for his shares from Chris-Craft instead of that from Bangor Punta. In a damage suit, as distinct from one for equitable relief, such proof is essential to sustain a 10b-5 claim." Ibid. (Emphasis in original.)

          On Chris-Craft's Rule 10b-6 claim, Judge Pollack held that, although the block purchases did not fall within any exemption to the Rule, Chris-Craft had no right to recovery:

          "Even granting that the block purchases resulted arith-

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          metically in Bangor Punta's achievement of control, there is no basis for concluding that, absent Bangor Punta's acquisition of these blocks, Chris-Craft would have achieved its goal of control." Id., at 1142.

          Based on its findings with respect to Piper and Bangor Punta, the District Court also held in favor of First Boston; the court specifically exonerated the firm of having "committed, or engaged in any course of conduct which operated as fraud or deceit upon Chris-Craft or the public shareholders of Piper." Id., at 1145.

          Chris-Craft appealed, and the SEC sought review of the District Court's denial of injunctive relief against Bangor Punta. In the Court of Appeals, each member of the panel wrote separately. All three members of the panel agreed that Chris-Craft had standing to sue for damages under § 14(e) and that a claim for damages had been established. However, Judges Gurfein and Mansfield, over Judge Timbers' dissent, sustained the District Court's denial of an injunction against Bangor.

Court of Appeals Majority Opinion

          The Court of Appeals directly answered the question concerning Chris-Craft's standing under § 14(e), which the District Court had not decided.¹² The Court of Appeals based its holding "on the statute itself (§ 14(e)) and such decisional law as there is that has touched on the question." 480 F.2d 341, 358. The opinion noted that the Second

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Circuit had on four occasions ¹³ addressed the issue whether a private cause of action might be implied under § 14(e). Although acknowledging that no case represented a square holding in this respect, the court interpreted the cases to intimate "that such an implied right of action would be reasonable." 480 F.2d, at 360. The court then noted that Chris-Craft could likely state a common-law tort claim in state court for "interference with a 'prospective advantage.' " Ibid.

          "We will not infer from the silence of the statute that Congress intended to deny a federal remedy and to extinguish a liability which, under established principles of tort law, normally attends the doing of a proscribed act." Id., at 360-361.

          With respect to the legislative history of § 14(e), the Court of Appeals expressly acknowledged that the focus of congressional concern was the protection of public shareholders. Given this purpose, the court concluded:

          "We can conceive of no more effective means of furthering the general objective of § 14(e) than to grant a victim of violations of the statute standing to sue for damages. . . . Particularly in light of the enforcement rationale of (J. I. Case Co. v.) Borak (377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964),) we believe it is both necessary and appropriate that (Chris-Craft) should be granted standing to sue for damages." 480 F.2d, at 361.

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          The court next reviewed the alleged § 14(e) violations for which Chris-Craft sought damages. In contrast to the District Court's conclusions, the Court of Appeals held that Piper's description of the Chris-Craft offer as "inadequate" and the failure to disclose the "put" provision in the Grumman agreement constituted actionable violations of § 14(e). 480 F.2d, at 364-365. As to Bangor Punta, the Court of Appeals agreed with Judge Pollack's determination that Chris-Craft had not been injured by the "gun-jumping" press release of May 8; on the other hand, the court held that BAR omission in Bangor's registration statement was actionable. The Court of Appeals expressly rejected Judge Pollack's conclusion that the registration statement was "unintentionally in error." On the contrary, the Court of Appeals held that Bangor Punta's officers "showed reckless disregard" in failing to disclose the BAR negotiations, although the court conceded that the officers were not shown to have had an "intent to defraud." Id., at 369. First Boston was likewise held culpable because its certification of the registration statement "amounted to an almost complete abdication of its responsibility (as an underwriter) . . . ." Id., at 373.

          The Court of Appeals also disagreed with the District Court's analysis of causation. Although agreeing that Chris-Craft failed to show that it would have won the takeover battle,¹⁴ the court relied upon Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970), as establishing a presumption of reliance

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and causation applicable to Chris-Craft. Under Mills,, so the court held, "we must presume that (Bangor's) offer was not so appealing, considering the BAR loss, as to have attracted any takers." 480 F.2d, at 375.

          "Since (Bangor) eventually acquired only about 51% of the outstanding Piper shares, it is clear that the 7% acquired through its exchange offer was critical to its success. Reliance and causation have been shown." Ibid.

          In addition to the § 14(e) claim, the Court of Appeals held that Chris-Craft could recover damages for Bangor's Rule 10b-6 violations; the three block purchases had a "presumptively . . . stimulating effect . . . which misled the public." 480 F.2d, at 378. Since those purchases amounted to 7% of Piper stock, "(e)ven arithmetically, it is apparent that the block purchases (by Bangor Punta) . . . were essential to achieve control." Id., at 379.

          The Court of Appeals then remanded with directions to the District Court to award damages in the amount of "the reduction in the appraisal value of (Chris-Craft's) Piper holdings attributable to (Bangor Punta's) taking a majority position and reducing (Chris-Craft) to a minority position . . . ." Id., at 380. Damages were to be awarded against all defendants jointly and severally. In addition, without discussing Chris-Craft's abandonment of its claim for equitable relief, the court instructed the District Court to enjoin Bangor for a period of at least five years from voting the Piper shares acquired through the exchange offer and in violation of Rule 10b-6. Ibid.

          Finally, Judge Timbers, writing in dissent on this issue, disagreed with the conclusion of Judges Mansfield and Gurfein that the SEC request for an injunction against future violations by Bangor Punta had properly been refused. In Judge Timbers' view, the District Court employed an im-

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proper legal standard in denying the SEC injunctive relief against Bangor.

Judge Gurfein's Concurring Opinion

          Judge Gurfein concurred "generally" in Judge Timbers' opinion for the court. On the issue of standing, Judge Gurfein agreed with the District Court's approach in considering the matter as one of "causation before considering the question of standing." 480 F.2d, at 393. Under Judge Gurfein's approach, Chris-Craft had standing because Bangor's acquisitions of Piper shares were necessary for control. As to scienter, Judge Gurfein was of the view that "mere negligence" would not suffice but that " 'recklessness that is equivalent to wilful fraud' is required . . . ." Ibid. (Citation omitted.)

          Judge Gurfein disagreed, however, with Judge Timbers' analysis of the alleged Rule 10b-6 violations. He refused to indulge the presumption of "stimulating effect" embraced by Judge Timbers and concluded rather that because "the (illegal) block purchases were necessary for control causation was established. . . ." 480 F.2d, at 393.

          With respect to the SEC action against Bangor Punta, Judge Gurfein, writing for himself and Judge Mansfield, upheld the District Court's refusal to grant a permanent injunction. Applying the "abuse of discretion" standard, Judge Gurfein concluded that "the matter is not so clear that we should substitute our judgment for the judgment of the experienced trial Judge below who sat as a chancellor in equity." Ibid.

Judge Mansfield's Concurring and Dissenting Opinion

          Judge Mansfield concurred in the "results" reached by Judge Timbers, except with respect to the Piper family's liability. Judge Mansfield agreed that the Piper communications violated § 14(e), but concluded that Chris-Craft had failed to prove damages resulting from those infractions.

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Applying the principles of Mills v. Electric Auto-Lite Co., supra, Judge Mansfield stated:

          "(Chris-Craft) must show that it suffered some resulting loss. This it has failed to do." 480 F.2d, at 401.

          On the other issues addressed by the majority opinion, Judge Mansfield concluded that Chris-Craft's standing under § 14(e) rested solely on the policy of vigorous enforcement of the antifraud provisions. 480 F.2d, at 396. As to scienter, Judge Mansfield concluded that intent to defraud had not been shown. He formulated instead the following test of scienter:

          "In short, the scienter requirement would be met if the corporate officer (1) knew the essential facts and failed to disclose them, or (2) failed or refused, after being put on notice of a possible material failure in disclosure, to apprise himself of the facts under circumstances where he could reasonably have ascertained and disclosed them without any extraordinary effort." Id., at 398.

          He concluded that the actions complained of satisfied this standard.

          Like Judge Gurfein, Judge Mansfield declined to indulge the presumption that Bangor's Rule 10b-6 violations actually operated to make its exchange offer deceptively attractive; he concurred solely on the ground that where a party achieves control through violations of the securities laws, the party is liable as a matter of law to an injured competitor.¹⁵

                            District Court Opinion on Relief

          Pursuant to the remand, Judge Pollack took evidence on damages. Although concluding that the Court of Appeals'

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mandate required the use of "hypothetical figures," he determined that Chris-Craft's damages were to be measured by comparing the value of its Piper holdings prior and subsequent to Bangor's achieving control. 384 F.Supp. 507, 512 (1974). Employing this method, he concluded on the basis of expert testimony that the fair market value of Piper stock as of the day Bangor achieved control was $48 per share. Id., at 517. After ascertaining that the value of Chris-Craft's takeover opportunity amounted to 5% of the fair market value of the stock, or $2.40 per share, id., at 523, the District Court awarded to Chris-Craft, based on its holdings of 697,495 shares, damages of $1,673,988. Ibid. The District Court also granted an award of prejudgment interest and entered an injunction, consistent with the mandate of the Court of Appeals, barring Bangor from voting the illegally acquired Piper shares for five years. Id., at 526.

                          Court of Appeals' Opinion on Relief

          In the final phase of the litigation, the Court of Appeals reversed on the damages issue and calculated Chris-Craft's damages without further remand to the District Court. The Court of Appeals fixed damages as the difference between what Chris-Craft had actually paid for Piper shares and the price at which the large minority block could have been sold at the earliest point after Bangor Punta gained control. Application of this formula produced damages in the amount of $36.98 per Piper share held by Chris-Craft, or a total of $25,793,365. 516 F.2d 172, 190 (1975). The court instructed the District Court to recompute prejudgment interest based on the revised damages award. Id., at 191. This new computation increased Chris-Craft's prejudgment interest from $600,000 to approximately $10 million.

          It is this judgment which is now under review.

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          We turn first to an examination of the Williams Act, which was adopted in 1968 in response to the growing use of cash tender offers as a means for achieving corporate takeovers.¹⁶ Prior to the 1960's, corporate takeover attempts had typically involved either proxy solicitations, regulated under § 14 of the Securities Exchange Act, 15 U.S.C. § 78n, or exchange offers of securities, subject to the registration requirements of the 1933 Act. § 77e. The proliferation of cash tender offers, in which publicized requests are made and intensive campaigns conducted for tenders of shares of stock at a fixed price, removed a substantial number of corporate control contests from the reach of existing disclosure requirements of the federal securities laws. See generally S.Rep.No.550, 90th Cong., 1st Sess., 2-4 (1967) (hereinafter Senate Report); H.R.Rep.No.1711, 90th Cong., 2d Sess., 2-4 (1968) (hereinafter House Report); U.S.Code Cong. & Admin.News 1968, p. 2811.

          To remedy this gap in federal regulation, Senator Harrison Williams introduced a bill in October 1965 to subject tender offerors to advance disclosure requirements. The original proposal, S. 2732, evolved over the next two years in response to positions expressed by the SEC and other interested parties from private industry and the New York Stock Exchange. 113 Cong.Rec. 854 (1967) (remarks of Sen. Williams). As subsequently enacted, the legislation requires takeover bidders to file a statement with the Commission indicating, among other things, the "background and identity" of the offeror, the source and amount of funds or other consideration to be used in making the purchases, the

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extent of the offeror's holdings in the target corporation, and the offeror's plans with respect to the target corporation's business or corporate structure. 15 U.S.C. § 78m(d)(1).

          In addition to disclosure requirements, which protect all target shareholders, the Williams Act provides other benefits for target shareholders who elect to tender their stock. First, stockholders who accept the tender offer are given the right to withdraw their shares during the first seven days of the tender offer and at any time after 60 days from the commencement of the offer. § 78n(d)(5). Second, where the tender offer is for less than all outstanding shares and more than the requested number of shares are tendered, the Act requires that the tendered securities be taken up pro rata by the offeror during the first 10 days of the offer. § 78n(d)(6).¹⁷ This provision, according to Senator Williams, was specifically designed to reduce pressures on target shareholders to deposit their shares hastily when the takeover bidder makes its tender offer on a first-come, first-served basis. 113 Cong.Rec. 856 (1967). Finally, the Act provides that if, during the course of the offer, the amount paid for the target shares is increased, all tendering shareholders are to receive the additional consideration, even if they tendered their stock before the price increase was announced. § 78n(d)(7). See generally 1 A. Bromberg, Securities Law: Fraud § 6.3(551), p. 120.2 (1975).

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            Besides requiring disclosure and providing specific benefits for tendering shareholders, the Williams Act also contains a broad antifraud prohibition, which is the basis of Chris-Craft's claim. Section 14(e) of the Securities Exchange Act, as added by § 3 of the Williams Act, 82 Stat. 457, 15 U.S.C. § 78n(e), provides:

          "It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation."

          This provision was expressly directed at the conduct of a broad range of persons, including those engaged in making or opposing tender offers or otherwise seeking to influence the decision of investors or the outcome of the tender offer. Senate Report 11.

          The threshold issue in these cases is whether tender offerors such as Chris-Craft, whose activities are regulated by the Williams Act, have a cause of action for damages against other regulated parties under the statute on a claim that antifraud violations by other parties have frustrated the bidder's efforts to obtain control of the target corporation. Without reading such a cause of action into the Act, none of the other issues need be reached.

          Our analysis begins, of course, with the statute itself. Section 14(e), like § 10(b), makes no provision whatever for a private cause of action, such as those explicitly provided in other sections of the 1933 and 1934 Acts. E. g., §§ 11, 12, 15 of the 1933 Act, 15 U.S.C. §§ 77k, 77l, 77o ; §§ 9, 16, 18, 20

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of the 1934 Act, 15 U.S.C. §§ 78i, 78p, 78r, 78t. This Court has nonetheless held that in some circumstances a private cause of action can be implied with respect to the 1934 Act's antifraud provisions, even though the relevant provisions are silent as to remedies. J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964) (§ 14(a)); Superintendent of Ins. v. Bankers Life & Cas. Co., 404 U.S. 6, 13 n. 9, 92 S.Ct. 165, 169, 30 L.Ed.2d 128 (1971) (§ 10(b)).

          The reasoning of these holdings is that, where congressional purposes are likely to be undermined absent private enforcement, private remedies may be implied in favor of the particular class intended to be protected by the statute. For example, in J. I. Case Co. v. Borak, supra, recognizing an implied right of action in favor of a shareholder complaining of a misleading proxy solicitation, the Court concluded as to such a shareholder's right:

          "While (§ 14(a)) makes no specific reference to a private right of action, among its chief purposes is 'the protection of investors,' which certainly implies the availability of judicial relief where necessary to achieve that result." 377 U.S., at 432, 84 S.Ct., at 1560. (Emphasis supplied.)

          Indeed, the Court in Borak carefully noted that because of practical limitations upon the SEC's enforcement capabilities, "(p)rivate enforcement . . . provides a necessary supplement to Commission action." Ibid. (Emphasis added.) Similarly, the Court's opinion Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730, 95 S.Ct. 1917, 1922, 44 L.Ed.2d 539 (1975), in reaffirming the availability of a private right of action under § 10(b), specifically alluded to the language in Borak concerning the necessity for supplemental private remedies without which congressional protection of shareholders would be defeated. Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 62, 95 S.Ct. 2069, 2078, 45 L.Ed.2d 12 (1975).

          Against this background we must consider whether § 14(e), which is entirely silent as to private remedies, permits this Court to read into the statute a damages remedy for unsuccessful tender offerors. To resolve that question we turn to the

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legislative history to discern the congressional purpose underlying the specific statutory prohibition in § 14(e). Once we identify the legislative purpose, we must then determine whether the creation by judicial interpretation of the implied cause of action asserted by Chris-Craft is necessary to effectuate Congress' goals.

          Reliance on legislative history in divining the intent of Congress is, as has often been observed, a step to be taken cautiously. Department of Air Force v. Rose, 425 U.S. 352, 388-389, 96 S.Ct. 1592, 1611-1612, 48 L.Ed.2d 11 (1976) (Blackmun, J., dissenting); United States v. Public Utilities Comm'n, 345 U.S. 295, 319, 73 S.Ct. 706, 719, 97 L.Ed. 1020 (1953) (Jackson, J., concurring); Scripps-Howard Radio v. FCC, 316 U.S. 4, 11, 62 S.Ct. 875, 880, 86 L.Ed. 1229 (1942). In this case both sides press legislative history on the Court not so much to explain the meaning of the language of a statute as to explain the absence of any express provision for a private cause of action for damages. As Mr. Justice Frankfurter reminded us: "We must be wary against interpolating our notions of policy in the interstices of legislative provisions." Id., at 11, 62 S.Ct., at 880. With that caveat, we turn to the legislative history of the Williams Act.

          In introducing the legislation on the Senate floor, the sponsor, Senator Williams, stated:

          "This legislation will close a significant gap in investor protection under the Federal securities laws by requiring the disclosure of pertinent information to stockholders when persons seek to obtain control of a corporation by a cash tender offer or through open market or privately negotiated purchases of securities." 113 Cong.Rec. 854 (1967). (Emphasis supplied.)

          The same theme of investor protection was emphasized eight months later by Senator Williams on the day the measure was passed by the Senate:

          "(The federal securities laws) provide protection for millions of American investors by requiring full disclosure

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          of information in connection with the public offering and trading of securities. These laws have worked well in providing the public with adequate information on which to base intelligent investment decisions.

          "There are, however, some areas still remaining where full disclosure is necessary for investor protection but not required by present law. One such area is the purchase by direct acquisition or by tender offers of substantial blocks of the securities of publicly held companies.

          "S. 510 . . . provides for investor protection in these areas." Id., at 24664. (Emphasis supplied.)

          Indeed, the bill as finally enacted by Congress was styled as a disclosure provision: "A bill to provide for full disclosure of corporate equity ownership of securities under the Securities Exchange Act of 1934." See generally 1 A. Bromberg, supra, § 6.3(121), at 116.2.

          Confirming the view that the legislation was designed to fill "a rather large gap in the securities statutes," Manuel Cohen, then Chairman of the SEC, testified before the Senate Subcommittee on Securities:

          "(T)he general approach . . . of this bill is to provide the investor, the person who is required to make a decision, an opportunity to examine and to assess the relevant facts . . . ." Senate Hearings 15.

          In response to the suggestion that the legislation would tend to aid entrenched management in warding off potentially beneficial takeover bids, Chairman Cohen testified:

          "But the principal point is that we are not concerned with assisting or hurting either side. We are concerned with the investor who today is just a pawn in a form of industrial warfare. . . . The investor is lost somewhere

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          in the shuffle. This is our concern and our only concern." Id., at 178. (Emphasis supplied.)

          The legislative history thus shows that Congress was intent upon regulating takeover bidders, theretofore operating covertly, in order to protect the shareholders of target companies. That tender offerors were not the intended beneficiaries of the bill was graphically illustrated by the statements of Senator Kuchel, cosponsor of the legislation, in support of requiring takeover bidders, whom he described as "corporate raiders" and "takeover pirates," to disclose their activities.

          "Today there are those individuals in our financial community who seek to reduce our proudest businesses into nothing but corporate shells. They seize control of the corporation with unknown assets, sell or trade away the best sources, and later split up the remains among themselves. The tragedy of such collusion is that the corporation can be financially raped without management or shareholders having any knowledge of the acquisitions. . . . The corporate raider may thus act under a cloak of secrecy while obtaining the shares needed to put him on the road to a successful capture of the company." 113 Cong.Rec. 857-858 (1967). (Emphasis supplied.)

          At different stages of the legislative debate, Senator Kuchel called the Senate's attention to specific takeover attempts directed against two companies. During the floor debate on the day S. 510 was passed, Senator Kuchel described one takeover contest:

          "If this attempt had succeeded, (the company) would have found itself under the control of a combination including significant foreign interests, without prior notice to the company, without an opportunity for examination into the circumstances surrounding the tender

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          offer, and without any regard for the rights of its stockholders." Id., at 24665. (Emphasis supplied.)

          Moreover, the Senate Subcommittee heard the testimony of Professor Hayes, speaking on behalf of himself and his co-author of a comprehensive study on takeover attempts,¹⁸ who stated:

          "The two major protagonists the bidder and the defending management do not need any additional protection, in our opinion. They have the resources and the arsenal of moves and countermoves which can adequately protect their interests. Rather, the investor who is the subject of these entreaties of both major protagonists is the one who needs a more effective champion . . . ." Senate Hearings 57. (Emphasis supplied.)

          In the face of this legislative history, the Court of Appeals understandably did not rely upon the legislative materials to support an implied cause of action for damages in favor of Chris-Craft. In this Court, however, Chris-Craft and the SEC contend that Congress clearly intended to protect tender offerors as part of a "pervasive scheme of federal regulation of tender offers." In support of their reading of the legislative history, they emphasize, first, that in enacting the legislation Congress was intent upon establishing a policy of even-handedness in takeover regulation. Congress was particularly anxious, Chris-Craft argues, " 'to avoid tipping the balance of regulation . . . .' "

          Congress was indeed committed to a policy of neutrality in contests for control, but its policy of evenhandedness does not go either to the purpose of the legislation or to whether a private cause of action is implicit in the statute. Neutrality is, rather, but one characteristic of legislation directed toward a different purpose the protection of investors. Indeed, the statements concerning the need for Congress to

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maintain a neutral posture in takeover attempts are contained in the section of the Senate Report entitled, "Protection of Investors." Taken in their totality, these statements confirm that what Congress had in mind was the protection of shareholders, the "pawn(s) in a form of industrial warfare." The Senate Report expressed the purpose as "plac(ing) investors on an equal footing with the takeover bidder," Senate Report 4, without favoring either the tender offeror or existing management. This express policy of neutrality scarcely suggests an intent to confer highly important, new rights upon the class of participants whose activities prompted the legislation in the first instance.

          Moreover, closer analysis shows that Congress' "equal footing" observations were in response to strong criticisms that the proposed legislation would unduly inhibit tender offers.¹⁹ As originally introduced, the disclosure proposals embodied in S. 2731 were avowedly pro-management in the target company's efforts to defeat takeover bids. See generally Note, The Williams Amendments: An Evaluation of the Early Returns, 23 Vand.L.Rev. 700 (1970). Subsequent committee hearings, however, indicated, first, that takeover bids could often serve a useful function, and, second, that entrenched management, equipped with considerable weapons in battles for control, tended to be successful in fending off possibly beneficial takeover attempts. Several witnesses specifically called the efficacy of the proposed legislation into question, since in their view the "scales are pretty unbalanced at the moment, and unbalanced very much in favor of management." Senate Hearings 117.

          The sponsors of this legislation were plainly sensitive to the suggestion that the measure would favor one side or the other in control contests; however, they made it clear that

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the legislation was designed solely to get needed information to the investor, the constant focal point of the committee hearings. Senator Williams articulated this singleness of purpose, even while advocating neutrality:

          "We have taken extreme care to avoid tipping the scales either in favor of management or in favor of the person making the takeover bids. S. 510 is designed solely to require full and fair disclosure for the benefit of investors." 113 Cong.Rec. 24664 (1967). (Emphasis supplied.)

          Accordingly, the congressional policy of "evenhandedness" is nonprobative of the quite disparate proposition that the Williams Act was intended to confer rights for money damages upon an injured takeover bidder.

          Besides the policy of evenhandedness, Chris-Craft emphasizes that the matter of implied private causes of action was raised in written submissions to the Senate Subcommittee. Specifically, Chris-Craft points to the written statements of Professors Israels and Painter, who made reference to J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). Chris-Craft contends, therefore, that Congress was aware that private actions were implicit in § 14(e).

          But this conclusion places more weight on the passing reference to Borak than can reasonably be carried. Even accepting the value of written statements received without comment by the committee and without cross-examination,²⁰ the statements do not refer to implied private actions by

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offeror-bidders. For example, Professor Israels' statement on this subject reads:

          "(A) private litigant could seek similar relief before or after the significant fact such as the acceptance of his tender of securities." Senate Hearings 67. (Emphasis supplied.)

          Similarly, Professor Painter in his written submission referred to "injured investors." Id., at 140. Neither Israels nor Painter discussed or even alluded to remedies potentially available to takeover bidders.

          More important, these statements referred to a case in which the remedy was afforded to shareholders the direct and intended beneficiaries of the legislation. In Borak, the Court emphasized that § 14(a), the proxy provision, was adopted expressly for "the protection of investors," 377 U.S., at 432, 84 S.Ct., at 1559, the very class of persons there seeking relief.²¹ The

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Court found no difficulty in identifying the legislative objective and concluding that remedies should be available if necessary "to make effective the congressional purpose." Id., at 433, 84 S.Ct., at 1560. Borak did not involve, and the statements in the legislative history relied upon by Chris-Craft do not implicate, the interests of parties such as offeror-bidders who are outside the scope of the concerns articulated in the evolution of this legislation.²²

          Chris-Craft and the SEC also rely upon statements in the legislative history which, they suggest, demonstrate that Congress in adopting the Williams Act was concerned with parties other than shareholders. First, they place particular emphasis upon a statement by Chairman Cohen in his Senate testimony that "shareholders are not the only persons concerned." From this statement, they argue that tender offerors were likewise within the sphere of congressional concern. In that colloquy, however, Chairman Cohen was plainly referring to persons in need of disclosure:

          "As soon as there is a takeover bid, everybody in the market gets excited. There are people who consider themselves professional or amateur arbitragers, and they begin to play the games that possibility permits." Senate Hearings 178.

          Thus, Chairman Cohen was referring to other actors in the marketplace, including arbitragers, who would benefit from disclosure. He was not referring to the needs of those required by the proposed legislation to make disclosure, the tender offerors themselves.

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          Finally, Chris-Craft emphasizes what it perceives as the Commission's express concern with the plight of takeover bidders faced with "unfair tactics by entrenched management." The SEC Chairman did indeed speak in the Subcommittee Hearings of the need to "regulate improper practices by management and others opposing a tender offer . . . ." Senate Hearings 184. But in so doing, he was not pleading the cause of takeover bidders; on the contrary, he testified that imposing disclosure duties upon management would "make it much easier for stockholders to evaluate the offer on its merits." Ibid. (Emphasis supplied.)

          In short, by extending the statute's coverage to solicitations in opposition to tender offers, Congress was seeking to broaden the scope of protection afforded to shareholders confronted with competing claims. Senator Williams, for example, was fully aware that in a contest for control, full disclosure by all contestants was needed to protect shareholders:

          "In the rather common situation where existing management or third parties contest a tender offer, shareholders may be exposed to a bewildering variety of conflicting appeals and arguments designed to persuade them either to accept or to reject the tender offer. The experience of the SEC with proxy fights offers ample evidence that this type of situation can best be controlled, and shareholders most adequately informed, if both sides to the argument are subject to the full and fair disclosure rules of the Federal securities laws." 113 Cong.Rec. 855-856 (1967). (Emphasis supplied.)

          Furthermore, in the very passages on which Chris-Craft relies as evidencing SEC concern for tender offerors, Chairman Cohen criticized any analysis which focused upon the legislation's impact on management or the takeover bidder:

          "Moreover, this type of analysis lays almost exclusive stress on the respective interests of the offeror and the

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          existing management, rather than upon the protection of the stockholders, . . . who are left to be treated as pawns in an elaborate game between the offerors and the management or perhaps other competing interests." Senate Hearings 184. (Emphasis supplied.)

          The legislative history thus shows that the sole purpose of the Williams Act was the protection of investors who are confronted with a tender offer. As we stated in Rondeau v. Mosinee Paper Corp., 422 U.S., at 58, 95 S.Ct., at 2075: "The purpose of the Williams Act is to insure that public shareholders who are confronted by a cash tender offer for their stock will not be required to respond without adequate information . . . ." We find no hint in the legislative history, on which respondent so heavily relies, that Congress contemplated a private cause of action for damages by one of several contending offerors against a successful bidder or by a losing contender against the target corporation.

          The dissent suggests, however, that Chris-Craft is suing under § 14(e) for injuries sustained in its status as a Piper shareholder, as well as in its capacity as a defeated tender offeror. Post, at 56-59. In contrast to that suggestion, Chris-Craft's position in this Court on the issue of standing is based on the narrow ground that the Williams Act was designed to protect not only target company shareholders, but rival contestants for control as well. Brief for Respondent 36-40, 43, 46-48, 50-54. It is clear, therefore that Chris-Craft has not asserted standing under § 14(e) as a Piper shareholder. The reason is not hard to divine. As a tender offeror actively engaged in competing for Piper stock, Chris-Craft was not in the posture of a target shareholder confronted with the decision of whether to tender or retain its stock. Consequently, Chris-Craft could scarcely have alleged a need for the disclosures mandated by the Williams Act. In short, the fact that Chris-Craft necessarily acquired Piper stock as a means of taking over Piper adds nothing to its § 14(e) standing

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arguments.²³ This probably explains why the Court of Appeals at no time intimated that it rested Chris-Craft's standing on its status as a Piper stockholder. Its opinion in this respect could hardly be clearer:

          "This is a case of first impression with respect to the right of a tender offeror to claim damages for statutory violations by his adversary. And our holding is premised on the belief that the harm done the defeated contestant is not that it had to pay more for the stock but that it got less stock than it needed for control." 480 F.2d, at 362. (Emphasis supplied.)

          Moreover, the items of damages cited in dissent, post, at 57-58, n. 6, as attributable to Chris-Craft in its status as a Piper shareholder are, upon analysis, actually related under these circumstances to Chris-Craft's status as a contestant for control of a corporation. First, the alleged "loss of the control premium," which Chris-Craft presumably otherwise would have enjoyed, relates on its face, not to Chris-Craft as a Piper shareholder per se, but to its status as a shareholder who failed to gain control. Second, the alleged loss of value as to a "locked-in," "exceptionally large block" of Piper stock likewise relates under these circumstances to a particular kind of Piper shareholder, namely one whose efforts to secure control necessarily resulted in the acquisition of major stockholdings in the company. In this regard, the Court of Ap-

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peals plausibly assumed that in order to dispose of its Piper holdings Chris-Craft would have to file a registration statement with the SEC, since Chris-Craft would presumably be engaged in a distribution of Piper stock. 516 F.2d at 188-189. In contrast no ordinary Piper shareholder would have had to comply with the 1933 Act's registration requirements in order to sell his stock, since the typical shareholder is not "an issuer, underwriter, or dealer." 15 U.S.C. § 77d(1).

          Consequently, the elements of damages mentioned in dissent are peculiar to Chris-Craft not as a "target shareholder" of Piper, but as a defeated tender offeror "injured" by its adversaries' alleged violations of the securities laws.²⁴

          Our conclusion as to the legislative history is confirmed by the analysis Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). There, the Court identified four factors as "relevant" in determining whether a private remedy is implicit in a statute not expressly providing one. The first is whether the plaintiff is " 'one of the class for whose especial benefit the statute was enacted . . . .' " Id., at 78, 95 S.Ct., at 2087. (Emphasis in original.) As previously indicated, examination of the statute and its genesis shows that Chris-Craft is not an intended beneficiary of the Williams Act, and surely is not one "for whose especial benefit the statute was enacted." Ibid. To the contrary, Chris-Craft is a member of the class whose activities Congress intended to regulate for the protection and benefit of an entirely distinct class, shareholder-offerees. As a party whose previously unregulated conduct was purposefully brought under federal control by the statute, Chris-Craft can scarcely lay claim to the status of "beneficiary" whom Congress considered in need of protection.

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          Second, in Cort v. Ash we inquired whether there was "any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one." Ibid. Although the historical materials are barren of any express intent to deny a damages remedy to tender offerors as a class, there is, as we have noted, no indication that Congress intended to create a damages remedy in favor of the loser in a contest for control. Fairly read, we think the legislative documents evince the narrow intent to curb the unregulated activities of tender offerors. The expression of this purpose, which pervades the legislative history, negates the claim that tender offerors were intended to have additional weapons in the form of an implied cause of action for damages, particularly if a private damages action confers no advantage on the expressly protected class of shareholder-offerees, a matter we discuss later. Infra, at 39.

          Chris-Craft argues, however, that Congress intended standing under under § 14(e) to encompass tender offerors since the statute, unlike § 10(b), does not contain the limiting language, "in connection with the purchase or sale" of securities. Instead, in § 14(e), Congress broadly proscribed fraudulent activities "in connection with any tender offer . . . or any solicitation . . . in opposition to or in favor of any such offer . . . ."

          The omission of the purchaser-seller requirement does not mean, however, that Chris-Craft has standing to sue for damages under § 14(e) in its capacity as a takeover bidder. It may well be that Congress desired to protect, among others, shareholder-offerees who decided not to tender their stock due to fraudulent misrepresentations by persons opposed to a takeover attempt. See generally 1 A. Bromberg, Securities Law: Fraud § 6.3 (1021), p. 122.17 (1969). See also Senate Report 2; House Report 3. These shareholders, who might not enjoy the protection of § 10(b) under Blue Chip Stamps v. Manor Drugs Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975), could perhaps

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state a claim under § 14(e), even though they did not tender their securities.²⁵ But increased protection, if any, conferred upon the class of shareholder-offerees by the elimination of the purchaser-seller restriction can scarcely be interpreted as giving protection to the entirely separate and unrelated class of persons whose conduct the statute is designed to regulate.

          Third, Cort v. Ash tells us that we must ascertain whether it is "consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff." 422 U.S., at 78, 95 S.Ct., at 2088. We conclude that it is not. As a disclosure mechanism aimed especially at protecting shareholders of target corporations, the Williams Act cannot consistently be interpreted as conferring a monetary remedy upon regulated parties, particularly where the award would not redound to the direct benefit of the protected class. Although it is correct to say that the $36 million damages award indirectly benefits those Piper shareholders who became Chris-Craft shareholders when they accepted Chris-Craft's exchange offer, it is equally true that the damages award injures those Piper shareholders who exchanged their shares for Bangor Punta's stock and who, as Bangor Punta shareholders, would necessarily bear a large part of the burden of any judgment against Bangor Punta. The class sought to be protected by the Williams Act are the shareholders of the target corporation; hence it can hardly be said that their interests as a class are served by a judgment in favor of Chris-Craft and against Bangor Punta. Moreover, the damages are awarded to the very party whose activities Congress intended to curb; Chris-Craft did not sue in the capacity of an injured Piper shareholder, but as a defeated tender offeror.

          Nor can we agree that an ever-present threat of damages against a successful contestant in a battle for control will provide significant additional protection for sharehold-

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ers in general. The deterrent value, if any, of such awards can never be ascertained with precision. More likely, however, is the prospect that shareholders may be prejudiced because some tender offers may never be made if there is a possibility of massive damages claims for what courts subsequently hold to be an actionable violation of § 14(e).²⁶ Even a contestant who "wins the battle" for control may well wind up exposed to a costly "war" in a later and successful defense of its victory. Or at worst on Chris-Craft's damages theory the victorious tender offeror or the target corporation might be subject to a large substantive judgment, plus high costs of litigation.

          In short, we conclude that shareholder protection, if enhanced at all by damages awards such as Chris-Craft contends for, can more directly be achieved with other, less drastic means more closely tailored to the precise congressional goal underlying the Williams Act.

          Fourth, under the Cort v. Ash analysis, we must decide whether "the cause of action (is) one traditionally relegated to state law . . . ." 422 U.S., at 78, 95 S.Ct., at 2088. Despite the pervasiveness of federal securities regulation, the Court of Appeals concluded in these cases that Chris-Craft's complaint would give rise to a cause of action under common-law principles of interference

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with a prospective commercial advantage. Although Congress is, of course, free to create a remedial scheme in favor of contestants in tender offers, we conclude, as we did in Cort v. Ash, that "it is entirely appropriate in this instance to relegate (the offeror-bidder) and others in (that) situation to whatever remedy is created by state law," id., at 84, 95 S.Ct., at 2091, at least to the extent that the offeror seeks damages for having been wrongfully denied a "fair opportunity" to compete for control of another corporation.

          What we have said thus far suggests that, unlike J. I. Case Co. v. Borak, supra, judicially creating a damages action in favor of Chris-Craft is unnecessary to ensure the fulfillment of Congress' purposes in adopting the Williams Act. Even though the SEC operates in this context under the same practical restraints recognized by the Court in Borak, institutional limitations alone do not lead to the conclusion that any party interested in a tender offer should have a cause of action for damages against a competing bidder.²⁷ First,

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as Judge Friendly observed Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937, 947 (C.A.2 1969), in corporate control contests the stage of preliminary injunctive relief, rather than post-contest lawsuits, "is the time when relief can best be given." Furthermore, awarding damages to parties other than the protected class of shareholders has only a remote, if any, bearing upon implementing the congressional policy of protecting shareholders who must decide whether to tender or retain their stock.²⁸ Indeed, as we suggested earlier, a damages award of this nature may well be inconsistent with the interests of many members of the protected class and of only indirect value to shareholders who accepted the exchange offer of the defeated takeover contestant.

            We therefore conclude that Chris-Craft, as a defeated tender offeror, has no implied cause of action for damages under § 14(e).

          In addition to its holding under § 14(e), the Court of Appeals held that Bangor was liable for damages under Rule 10b-6 because of its off-exchange cash purchases of Piper stock in May 1969. Although the Court of Appeals imposed joint and several liability upon all defendants with respect to the injury occasioned by Bangor's achieving control of Piper, our holding in Part IV, supra, that no cause of action for damages lies under § 14(e) in favor of Chris-

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Craft, necessarily removes all petitioners except Bangor Punta from any potential liability in these cases. The issue that remains is whether Chris-Craft has a cause of action for damages against Bangor alone by virtue of the latter's alleged Rule 10b-6 violations. We hold that it does not.

          Rule 10b-6 ²⁹ is an antimanipulative provision designed to protect the orderliness of the securities market during distributions of stock. The Rule in essence prohibits issuers whose stock is in the process of distribution from market-tampering by purchasing either the stock or rights to purchase the stock until the distribution has been completed. The purpose of the Rule is to prevent stimulative trading by an issuer in its own securities in order to create an unnatural and unwarranted appearance of market activity. See generally E. Aranow & H. Einhorn, Tender Offers for Corporate Control 131 (1973). Here, the Court of Appeals held, and its holding is unchallenged, that the cash purchases of Piper stock during the pendency of Bangor's exchange offer constituted purchases of "right(s) to purchase" Bangor stock within the meaning of Rule 10b-6.³⁰

          Without questioning the finding of Rule 10b-6 violations, Bangor strenuously argues that Chris-Craft fails the standing test applied Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975).³¹ The concern of Rule 10b-6 in these circumstances, Bangor suggests, is to foreclose manipulative trading which would affect the price of Bangor Punta stock, since Bangor Punta securities were being distributed

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in the exchange offer. Because Chris-Craft neither purchased nor sold Bangor securities, it is foreclosed, under Bangor's analysis, from suing under Rule 10b-6.

          If we accepted Bangor's analysis, Rule 10b-6 would provide no remedy for an entire class of persons who actually purchased or sold securities, namely, those investors who either bought or sold Piper stock, which in turn represented "rights" to purchase Bangor stock then in distribution. This class of securities would, under the SEC's theory, be potentially affected by Bangor's off-exchange purchases, since acquisitions of rights to acquire stock during a distribution have, under the SEC's view of Rule 10b-6, at least the potential for artificially raising the price of those rights. Thus, Bangor's theory would foreclose, among others, any investors who purchased Piper stock after the unlawful acquisitions; this would be true even though the price paid for the stock might be shown to reflect the stimulative effects of Bangor's off-market, block purchases. In this respect, this case is readily distinguishable from Blue Chip, where the complainants made no purchases of stock at all; unlike that situation, here Chris-Craft was a purchaser of Piper common stock, the very class of securities with respect to which Bangor was held to have committed Rule 10b-6 violations.

          We conclude, however, that these cases do not call for a definitive resolution of the law of standing under Rule 10b-6, as Bangor would have us do. Nor do we find it appropriate to do so under the unusual circumstances presented here. First, the Court of Appeals, although sensitive to the Birnbaum issue, did not have the benefit of our decision in Blue Chip in resolving the standing issue. Second, in this Court both Chris-Craft and the United States, in its amicus brief on certiorari, contend that § 14(e)'s broad prohibition of "manipulative acts or practices" in tender offers embraces acts proscribed under the more specific mandate of Rule 10b-6. Brief for Respondent 56; Brief for United States as

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Amicus Curiae 16-17. Thus, to this extent the issue of Rule 10b-6 standing has not been fully explored by the parties, because of their initial misconception as to Chris-Craft's standing to sue for damages under § 14(e).

          Although we reserve judgment on the broader standing issues arising under Rule 10b-6, we hold that, in the context of these cases, Chris-Craft is without standing to sue for damages on account of Bangor's alleged Rule 10b-6 violations. Our holding is based upon one critical factor: As the parties themselves have framed the issues for resolution in this litigation, Chris-Craft is clearly outside the express concern of Rule 10b-6. At no time has Chris-Craft complained of or even suggested that the price which it paid for Piper shares was influenced by Bangor's Rule 10b-6 violations. Indeed, Chris-Craft does not assert standing as a Piper shareholder; on the contrary, it claims damages because, in its view of the case, it lost the opportunity to gain control of Piper by virtue of Bangor's Rule 10b-6 violations. Assuming the correctness of this theory, the fact remains that Rule 10b-6 is not directed at or concerned with contests for corporate control. This technical rule is focused narrowly upon a precise goal maintaining an orderly market for the distribution of securities free from artificial or manipulative influences. Thus, as the issues have been framed, Chris-Craft did not come to the courts in the posture of a hoodwinked investor victimized by market manipulation; its complaint, as we noted, is that it lost a chance to gain control of a corporation, a claim beyond the bounds of the specific concern of Rule 10b-6.

          Our conclusion in this respect is buttressed by the close relationship of Rule 10b-6 with § 9 of the 1934 Act, 15 U.S.C. § 78i. Section 9, among other things, prohibits transactions by issuers in their own securities, if forbidden by SEC regulations, even though the transactions are designed to stabilize the market for the issuer's stock. § 78i(a)(6). The SEC suggests in its amicus brief that Rule

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10b-6 was promulgated pursuant to the Commission's authority under § 9(a)(6),³² as well as under § 10(b) of the 1934 Act. It contends that, in view of this bifurcated statutory origin, Chris-Craft need only be a purchaser of Piper stock to have standing under Rule 10b-6, since § 9 requires only that an aggrieved party have purchased or sold "any security" affected by the violation. 15 U.S.C. § 78i(e). Under this view, Chris-Craft's failure to purchase Bangor Punta stock is irrelevant, since its purchases of Piper shares satisfied the "any security" requirement of § 9.

            Unlike § 10(b), however, § 9 provides an express cause of action for persons injured by unlawful market activities. 15 U.S.C. § 78i(e). Yet, that cause of action is framed specifically in favor of "any person who shall purchase or sell any security at a price which was affected by such act or transaction . . . ." Ibid. (Emphasis supplied.) Congress therefore focused in § 9 upon the amount actually paid by an investor for stock that had been the subject of manipulative activity. This is not, as we have seen, the gravamen of Chris-Craft's complaint. It seeks no recovery for an improper premium exacted for Piper stock; rather it desires compensation for its lost opportunity to control Piper. We therefore conclude that, on its claimed basis for relief, Chris-Craft cannot avail itself of Rule 10b-6.

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          Our resolution of these issues makes it unnecessary to address the other questions raised by the parties in their petitions for certiorari. Since we have concluded that Chris-Craft cannot avail itself of § 14(e) or Rule 10b-6 in its suit for damages, it is unnecessary to consider the Court of Appeals' holdings with respect to scienter, causation, the calculation of damages, the imposition of joint and several liability, the liability of underwriters in § 14(e) damages actions, and the award of prejudgment interest.

          Apart from awarding damages, however, the Court of Appeals also ordered the District Court to enjoin Bangor Punta from voting the illegally acquired Piper shares for a period of five years. In compliance with that directive, Judge Pollack on remand entered an injunction to remain in effect for a period of five years from November 12, 1974, the date on which judgment was entered. 384 F.Supp., at 528-529. On appeal, the Court of Appeals affirmed that portion of the District Court's order.

          We hold that, under the circumstances presented here, this injunction should not have been granted. As we previously indicated, Chris-Craft prior to the trial on liability expressly waived any claim to injunctive relief. The case was tried in the District Court, without a jury, exclusively as a suit for damages. See 337 F.Supp., at 1136 n. 8, 1137, 1141-1142, n. 18, 1146. Accord, 480 F.2d, at 355, 379. Under these circumstances, our holding that Chris-Craft does not have a cause of action for damages under § 14(e) or Rule 10b-6 renders that injunction inappropriate premised as it was upon the impermissible award of damages.³³ The inap-

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propriateness of the injunction is particularly acute in this litigation, where the order was entered almost four years after the contest for control had ended and where no regard was given to the interests of the protected class of shareholder-offerees, many of whom would be at least indirectly disadvantaged by the award.³⁴

          Accordingly, the judgment of the Court of Appeals is

          Reversed.

           Mr. Justice BLACKMUN, concurring in the judgment.

          I concur in the judgment. For the reasons set out in Mr. Justice STEVENS' dissenting opinion, post, p. 53, I am willing to begin with the premise that respondent Chris-Craft had "standing" in the sense that it possessed an implied right to sue under § 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(e). Unlike the dissenters, however, I do not conclude, from this, that the Court of Appeals' judgment as to liability is to be affirmed. Since I am of the opinion that respondent failed to prove that petitioners' violations of the securities laws caused its injury, I agree with the Court that the judgment below should be reversed.^1a

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          For the sake of clarity, it is useful to review briefly the acts that constituted violations of the securities laws and to identify the violators.

          Three violations of § 14(e) were isolated by the District Court and the Court of Appeals. The first occurred when W. T. Piper, Jr., wrote the letter of January 27 to the Piper shareholders and therein described the Chris-Craft offer as "inadequate and not in the best interests of Piper's shareholders." Petitioner First Boston reviewed that letter. Chris-Craft alleged that the description of its offer was a misstatement of material fact. In addition, the letter omitted to reveal First Boston's opinion that the price Chris-Craft was offering for Piper shares was fair, and it failed to disclose the pending negotiations with Grumman Aircraft Corporation.

          The second § 14(e) violation occurred with the Piper press release and letter to its shareholders on January 29. The sins in this instance were those of omission: Although the release and letter discussed the agreement with Grumman, they were silent about Grumman's option to return the shares to Piper at cost plus interest, and about Piper's obligation to keep the sale proceeds in a separate fund free from liens.

          Finally, the courts determined that petitioners Bangor Punta and First Boston omitted to state a material fact relating to the value of the Bangor & Aroostock Railroad (BAR) in the financial statements filed in connection with Bangor's exchange offer. Specifically, the papers did not reveal that Bangor had been offered only $5 million for the sale of BAR, in the face of the facts that BAR was carried on Bangor's books at $18.4 million, and that no other offer appeared to be forthcoming.

          In addition to these § 14(e) violations, the courts found that Bangor had not complied with Securities and Exchange Commission Rule 10b-6, 17 CFR § 240.10b.6 (1976). This

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occurred when Bangor in May 1969 made its three privately negotiated large purchases of Piper stock, while awaiting the effective date of its exchange offer.

          This summary reveals that, on the accepted premises, the Pipers were guilty both of misstatements of material facts and of omissions; that Bangor violated § 14(e) by omitting to state material facts; that Bangor violated Rule 10b-6 by its purchases of the large blocks of Piper stock; and that First Boston, like Bangor, omitted to reveal material facts, both in connection with the Piper letters and with regard to the BAR negotiations.

          Standards for proving causation in a securities law case were established Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970), and Affiliated Ute Citizens v. United States, 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972). It must be shown that the misstatement or omission is "material.&