If you’ve taken a course in securities law, you’ve undoubtedly heard of, and I hope have read, SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir.), cert. denied, 394 U.S. 976 (1968). That case is famous for the Second Circuit Court of Appeals’ adoption of the “disclose or abstain” rule for corporate insiders. The case is so well known that I was intrigued to hit on a tenuous link between the case and the recently released movie Bridge of Spies directed by Steven Spielberg.
The link begins with a paperboy and a hollow nickel. According to this story in yesterday’s The New York Times, the paperboy discovered the customized coin in his tip money. It turns out that the nickel contained a microfilm with coded message. That discovery eventually led to the arrest and eventual conviction of of the Soviet spy Rudolf Ivanovich Abel.
The connection to Bridge of Spies? The film, which I have not seen, reportedly tells the story of James B. Donovan, the New York lawyer who unsuccessfully defended Mr. Abel. Mr. Donovan also lost Mr. Abel’s appeal to the U.S. Supreme Court, Abel v. U.S., 362 U.S. 217 (1960). Later, Mr. Donovan participated in the negotiation of the exchange of Mr. Abel for the captured American U-2 pilot Francis Gary Powers.
The connection to Texas Gulf Sulphur? The newsboy, Jimmy Bozart, eventually used the proceeds of a reward for discovering the coin “to buy stock options in a mining company called Texas Gulf Sulphur”. According to Mr. Bozart, “We had a tip that they had discovered the largest sulfur deposit ever, in Canada . . . It turned out to be true, and we made a bunch of money.” It’s not clear whether Mr. Bozart is referring to the famous ore discovery that was at issue in Texas Gulf Sulphur. The spectacular strike in that case involved the discovery of an ore body of copper, zinc and silver, not sulphur.