15 U.S.C. § 78n(d)(2) (emphasis added); see 17 C.F.R. § 240.14d-1(g). Rule 14e-3 does not use the term “bidder” and does not cross-reference Regulation 14D. Similarly, Section 14(e) does not define the term “person” and does not cross-reference the broader definition of “person” in Section 14(d)(2). Instead, Rule 14e-3 introduces a new term (“offering person”) with a new definition (a person that “has taken a substantial step or steps to commence, or has commenced, a tender offer”). 17 C.F.R. § 240.14e-3(a). That Rule 14e-3 does not use the familiar term “bidder” refutes Defendants’ contention that the two terms are co-extensive. SEC v. McCarthy, 322 F.3d 650, 656 (9th Cir. 2003) (different terms “demonstrates that Congress intended to convey a different meaning ”). Defendants contend (Opp. 36) that the SEC “rejects” any distinction between a “bidder” for disclosure purposes and an “offering person” for insider- trading purposes. This argument is belied by the regulatory history, and SEC

PLAINTIFF CANNOT PLEAD A SECTION 14(e) CLAIM AGAINST THE MERUELO PARTIES Section 14(e) of the Exchange Act regulates tender offers. See 15 U.S.C. § 78n(e). Even if Plaintiff had pled Section 14(e), he would still fail to state a claim.

ARGUMENT A. Plaintiffs Are Likely To Succeed On The Merits Of Their Insider Trading Claims Under Section 14(e) And Rule 14e-3 Section 14(e) and Rule 14e-3 prohibit tipping and trading on the basis of material nonpublic information relating to a tender offer. 15 U.S.C. § 78n(e); 17 C.F.R. § 240.14e-3(a). “If any person has taken a substantial step or steps to commence, or has commenced a tender offer,” it is unlawful for “any other person who is in possession of material information relating to such tender offer,” that he knows or has reason to know is nonpublic and comes from the “offering person,” to “purchase or sell . . . such securities.”

Litig., 307 F. Supp. 3d 222, 242 (S.D.N.Y. 2018) (refusing to apply group pleading exception to outside directors). B. Plaintiff Does Not Allege A Plausible Claim Against The Former Outside Directors The elements for a Section 14(a), 15 U.S.C. § 78n(a), Rule 14a-9, 17 C.F.R. § 240.14a- 9(a) claim are: (1) that the proxy materials contain a false or misleading statement of a material fact or omit to state a material fact necessary in order to make the statement made not false or misleading; (2) that the misstatement or omission of a material fact was the result of knowing, reckless or negligent conduct; and (3) that the proxy solicitation was an essential link in effecting the proposed corporate action.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Case 3:14-cv-01742-MAS-TJB Document 34-2 Filed 05/16/17 Page 2 of 6 PageID: 234 3 Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-3 [17 C.F.R. § 240.14e-3] promulgated thereunder, in connection with any tender offer or request or invitation for tenders, from engaging in any fraudulent, deceptive, or manipulative act or practice, by: (a) purchasing or selling or causing to be purchased or sold the securities sought or to be sought in such tender offer, securities convertible into or exchangeable for any such securities or any option or right to obtain or dispose of any of the foregoing securities while in possession of material information relating to such tender offer that Defendant knows or has reason to know is nonpublic and knows or has reason to know has been acquired directly or indirectly from the offering person; the issuer of the securities sought or to be sought by such tender offer; or any officer, director, partner, employee or other person acting on behalf of the offering person or such issuer, unless within a reasonable time prior to any such purchase or sale such inform

Wachtell derided PS Fund 1’s trading activity as exploiting “loopholes” that needed to be closed. 16 Allergan tries to make hay of the fact that the definitions in section 14(d), 15 U.S.C. § 78n(d)(2), do not apply to Rule 14e–3. But the definitions that apply to Rule 14D, are in fact, applicable to Rule 14E.

Under Section 14(a), a defendant can be held liable if he or she solicits proxies, is a participant in a proxy solicitation, or permits his or her name to be used in a proxy solicitation. See 15 U.S.C. § 78n(a)(1); 17 C.F.R. § 240.14a-101, Item 4. The SEC broadly defines “solicitation” to “include . . . [any] communication to security holders under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy.”

Mr. Price Is Entitled To Summary Judgment On The Section 14(a) Claim Because He Did Not Solicit The Joint Proxy Plaintiffs have sued Mr. Price in Count V under Section 14(a) in connection with a Joint Proxy issued by Bank of America and Merrill Lynch in November 2008. Section 14(a) makes it unlawful for a person, in violation of SEC rules, to “solicit or to permit the use of his name to solicit any proxy . . . .” 15 U.S.C. § 78n(a)(1). This Court previously dismissed the Section 14(a) claims against Mr. Price and the other Bank of America non-director senior officers in the Derivative Action, holding that the officers could not be liable under Section 14(a) because they did not solicit the Joint Proxy, were not participants in the solicitation, and did not permit the use of their names in the solicitation.

Case 1:07-cv-09633-LBS-DFE Document 87 Filed 07/22/2008 Page 100 of 102 84 III. THE COMPLAINT FAILS TO STATE A CLAIM UNDER SECTION 14(A) OF THE EXCHANGE ACT Plaintiffs' claim under Section 14(a) of the Exchange Act is based on SEC Rule 14a-9, which states that "no solicitation . . . shall be made by means of any proxy statement . . . containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading." 17 C.F.R. § 240.14a-9(a) (2008); see 15 U.S.C. 78n(a). The Section 14(a) claim is subject to Rule 9(b) because it sounds in fraud, as discussed above.

The SAC also alleges that the Proxy was false and misleading because the fairness analysis conducted by Goldman Sachs included a “discounted cash flow analysis” against the Case One projections (¶¶ 94-95) and because it omitted certain details about the Case Two projections (¶¶ 96-101) and Goldman Sachs’ analysis (¶¶ 102-107). Case 3:16-cv-01792-SI Document 65 Filed 04/21/17 Page 18 of 39 PAGE 13 – FEI DEFENDANTS’ MOTION TO DISMISS SECOND AMENDED COMPLAINT III. ELEMENTS OF CLAIM AND PLEADING STANDARD Section 14(a) prohibits the solicitation of proxies “in contravention of such rules and regulations as the [SEC] may prescribe as necessary or appropriate in the public interest or for the protection of investors . . . .” 15 U.S.C. § 78n(a)(1). SEC Rule 14a-9 bars solicitation by means of a proxy “containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading . . . .” 17 C.F.R. § 240.14a-9(a).