who received Holding preferred stock. When the Internal Revenue Service issued the ruling letter, it did not know that petitioner would claim a deduction for its legal fees and for its Morgan Stanley fee. On July 10, 1978, Morgan Stanley’s written fairness opinion was delivered to the board. This opinion concluded that the terms of the proposed merger agreement and related exchange offer taken as a whole were fair and equitable to petitioner’s shareholders from a financial point of view. On August 15, 1978, a special meeting of petitioner’s shareholders was held at which the merger agreement was approved. Later the same day, there was a closing of both parts of the transaction pursuant to the exchange offer and the merger agreement. In the transaction, 179 of petitioner’s shareholders (<HOLDING>) voluntarily exchanged their stock on a
holding that sales of corporate stock by six individual defendants for a total of approximately 4200000 were sufficient to support inference of scienter against them under prepslra pleading standard holding approximately 21 percent of petitioners common stock holding stock transfer restriction in corporate bylaws did not prevent levy against and sale of stock by third party in order to pay judgment holding that ownership of thirtyfive percent of total outstanding shares of a stock constitutes effective control holding that stock sales by one defendant of approximately 8000 shares for profit of 173000 raised strong inference of fraudulent intent