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information had been obtained in breach of fiduciary obligations
to keep the information confidential. The complaint alleged
that, on the basis of material non-public information that Boesky
had obtained through this trading scheme, Boesky had traded in
the securities of certain companies, including, from February 18
to 21, 1986, petitioner. Boesky settled this complaint, agreeing
to pay a $50 million fine, to disgorge another $50 million in
profits from his illegal activities, to refrain from further
violations of the securities laws, and to cooperate in a Federal
investigation into his and others’ illegal activities.
In December 1986, petitioner filed a 16-count complaint
(Complaint) in U.S. District Court for the Northern District of
Illinois against Boesky, Brown, Levine, Sokolow, Goldman, Drexel,
and Shearson (collectively, defendants). Counts I through V
alleged violations of Federal securities laws. Counts VI through
VIII alleged violations of the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. sections 1961 and 1964(c).
Counts IX through XVI alleged violations of common law. All
sixteen counts alleged that petitioner had suffered damages in
excess of $235 million. Paragraph 64 of the Complaint alleged as
"Adverse Financial Consequences to FMC":
As a direct and proximate result of the
illegal conduct alleged herein, FMC paid
approximately $220 million more for the
publicly held common stock of FMC tendered in
response to FMC's purchase offer than FMC
would have paid absent the illegal conduct.
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