422 U.S. 49 (1975)
Mosinee Paper Corp. is a Wisconsin company engaged in the manufacture and sale of paper, paper products, and plastics with its principal place of business in Mosinee, Wisconsin.1 Its only class of equity security is common stock registered under the Securities Exchange Act of 1934, with slightly more than 800,000 shares outstanding at all times relevant to the litigation.2
In April 1971 Francis A. Rondeau, a Mosinee businessman, began making large purchases of the company's common stock in the over-the-counter market, some in his own name and others in the name of businesses and a foundation known to be controlled by him.3 By May 17, 1971, he had acquired 40,413 shares, more than five percent of those outstanding, but did not file a Schedule 13D.4 He continued purchasing and by July 30, 1971, had acquired more than 60,000 shares.5
On July 30, 1971, the chairman of the board informed Rondeau by letter that his activity had given rise to numerous rumors and seemed to have created problems under the Federal Securities Laws.6 Rondeau immediately stopped placing orders and consulted his attorney. On August 25, 1971, he filed a Schedule 13D disclosing among other things his purpose to seek to acquire additional stock to obtain effective control of the company, possibly through a public cash tender offer.7 He amended the form one month later to reflect more accurately the allocation of shares.8
On August 27, 1971, the company sent a letter to its shareholders informing them of the disclosures in the Schedule 13D and stating that by his tardy filing Rondeau had withheld information for more than two months in violation of federal law.9 Six days later the company initiated suit in the United States District Court for the Western District of Wisconsin against Rondeau, his companies, and two banks that had financed some of his purchases.10 The complaint alleged that they were engaged in a scheme to defraud the company and its shareholders in violation of the securities laws and prayed for an injunction prohibiting voting or pledging stock, requiring divestiture, and for damages.11
After three months of pretrial proceedings, Rondeau moved for summary judgment. He conceded the violation of the Williams Act but contended it was due to lack of familiarity with the securities laws and that neither the company nor its shareholders had been harmed.12 The District Court found no material issues of fact regarding his lack of willfulness, concluded that any anxiety suffered was not irreparable harm, and entered summary judgment against the company.13 The Court of Appeals reversed. It remanded with instructions to enjoin Rondeau and his codefendants from further violations and from voting the shares purchased between the due date and the filing date for a period of five years.14 The Supreme Court granted certiorari.
Whether a showing of irreparable harm is necessary for a private litigant to obtain injunctive relief in a suit under § 13(d) of the Securities Exchange Act of 1934?15
The traditional standards governing extraordinary equitable relief apply to private actions under the securities laws, so that a plaintiff must demonstrate irreparable harm and the inadequacy of legal remedies before obtaining an injunction.16
Yes. The district court correctly applied this rule when it found that Rondeau's late filing of the Schedule 13D was inadvertent, that he promptly cured the violation upon notice, and that the company and its shareholders suffered no harm beyond predictable anxiety that did not rise to the level of irreparable injury.17
The Court of Appeals erred by holding that the issuer need not show irreparable harm because it is best positioned to enforce compliance with the Williams Act.18 The Supreme Court held that even when a private right of action is implied, the plaintiff remains bound by the historic prerequisites for injunctive relief, including proof of irreparable harm, as confirmed by the absence of any cognizable danger of recurrent violation once the Schedule 13D had been filed.19
Related opinions on this issue
Justice Brennan dissented on the ground that the Williams Act is a prophylactic statute designed to ensure that investors and management receive notice at the earliest possible moment of any potential shift in corporate control.22 He read the Court of Appeals decision as correctly authorizing injunctive relief upon proof of the violation itself, irrespective of motivation, irreparable harm to the corporation, or detriment to investors.23 In his view the majority's insistence on a separate showing of harm undermines the congressional purpose by requiring inquiry into the results of the violation rather than treating timely disclosure as the statutory objective.24