Jacob Schein and Marvin H. Schein v. Melvin Chasen, Antone F. Gregorio v. Lum's, Inc.

This case returns to us after an extraordinary journey. In Schein v. Cha-sen, 478 F.2d 817 (2d Cir. 1973), we reversed the judgment of the trial court dismissing plaintiffs’ shareholder derivative suit. (Kaufman, C. J., dissenting). The majority concluded, under Florida laW, that investors who sell stock on the basis of inside information provided by a stockbroker — who in turn received the information from the president of the issuer corporation — may be liable to the corporation in a shareholder derivative action. They also found that the stockbroker who relayed the information could be…