Black v. Shearson, Hammill & Co.

The principal elements of this appeal are the duty of a stock broker, owed to his customers who purchase the securities of a corporation, to disclose to them material facts known to him concerning the corporation; the duty of a director of the corporation, owed to it, not to disclose the same facts if he acquired knowledge of them as a director; and the consequences which may arise when the broker and the director are the same person.

Appellant Shearson, Hammill & Go. (hereinafter “Shear-son”) is a copartnership engaged in the stock brokerage business. At relevant times, appellant Dunbar was a…