## Facts

- Indiana National Corporation was an issuer with equity securities registered under § 12 of the Securities Exchange Act of 1934.
- In 1981–1982, a group of minority shareholders collectively acquired beneficial ownership exceeding 5% of Indiana National’s stock, triggering § 13(d) and Schedule 13D disclosure duties.
- The shareholders filed Schedule 13D disclosures with the SEC and transmitted them to the issuer.
- Indiana National alleged the Schedule 13D filings were materially false and misleading, including inadequate disclosure of the group’s plans or proposals regarding control or influence over the company and other required information.
- Indiana National sought only equitable relief: (1) an order compelling amended Schedule 13D filings and (2) an injunction barring further share acquisitions and requiring divestiture of shares allegedly acquired in violation of § 13(d).
- The district court dismissed the complaint, holding issuers lack an implied private right of action under § 13(d), and Indiana National appealed.

## Issues

1. Whether an issuer has an implied private right of action under Exchange Act § 13(d) to seek injunctive relief for materially false or misleading Schedule 13D filings.
2. If such a right exists, whether equitable remedies may include corrective disclosure orders and restraints on further acquisitions pending compliance.

## Decision

- The Seventh Circuit reversed the dismissal and remanded.
- The court held an issuer has an implied right of action under § 13(d) to seek injunctive relief for noncompliance with Schedule 13D disclosure obligations.
- The court treated issuer-initiated equitable enforcement as consistent with § 13(d)’s disclosure function and the Williams Act’s investor-protection purpose.

## Legal Principles

- Exchange Act § 13(d) is primarily a disclosure statute intended to give the market early notice of significant stock accumulations that may signal a potential shift in corporate control.
- An issuer may sue under an implied right to obtain equitable relief aimed at achieving accurate and complete Schedule 13D disclosure (including orders compelling corrective amendments).
- Injunctive relief may extend to temporarily restraining further acquisitions pending adequate disclosure, as a means of enforcing the statute’s informational objectives rather than imposing damages liability.
- Recognition of issuer standing is supported by the statutory structure requiring Schedule 13D transmission to the issuer, positioning the issuer to identify and challenge deficient disclosures while complementing SEC enforcement.

## Conclusion

The Seventh Circuit recognized an implied issuer right to seek injunctive relief under § 13(d) to compel truthful, complete Schedule 13D disclosures and to restrain further stock acquisitions pending compliance, and it remanded for further proceedings consistent with that holding.


Indiana National Corp. v. Rich, 712 F.2d 1180 (7th Cir. 1983)