Sec. and Exch. Comm'n v. Shanahan, Jr., No. 10-1820 (8th Cir. 2011)
Annotate this Case
The SEC brought a civil action against defendant alleging that, as an outside director of Engineered Support Systems, Inc. (ESSI), he violated numerous federal securities laws by participating in the grant of backdated, "in-the-money" stock options to ESSI officials including his father. At issue was the district court's grant of defendant's Fed. R. Civ. Pro. 50(a)(1) motion for judgment as a matter of law. The court agreed with the district court's conclusion that the SEC had failed to prove the requisite elements of scienter and negligence. The court also held that there was no clear abuse of discretion in excluding any reference to the Incentive Stock Option Agreement between defendant's father and ESSI. Accordingly, the court affirmed the judgment of the district court.
Court Description: Civil case - Securities. District court did not err in granting defendant's motion for judgment as a matter of law at the close of the SEC's case on the ground that the SEC had failed to prove the required elements of scienter and negligence with respect to its claims that defendant had violated securities law by participating in the grant of backdated "in-the- money" stock options to corporate executives.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.