First City Financial Corp., a Canadian company controlled by the Belzberg family, was engaged in the business of investing in publicly held American corporations. Marc Belzberg identified Ashland Oil Company as a potential target, and on February 11, 1986, he secretly purchased 61,000 shares of Ashland stock for First City. By February 26, additional secret purchases of Ashland shares pushed First City's holdings to just over 4.9 percent of Ashland's stock. These last two purchases were effected for First City by Alan "Ace" Greenberg, the chief executive officer of Bear Stearns, a large Wall Street brokerage. On March 4, Belzberg called Greenberg and told him, "It wouldn't be a bad idea if you bought Ashland Oil here." Immediately after the phone call, Greenberg purchased 20,500 Ashland shares for about $44 per share. If purchased for First City, those shares would have increased First City's Ashland holdings above 5 percent. Greenberg believed he was buying the shares for First City under a put and call agreement, under which First City had the right to buy the shares from Bear Stearns and Bear Stearns had the right to require First City to buy the shares from it. Between March 4 and 14, Greenberg purchased an additional 330,700 shares. On March 17, First City and Bear Stearns signed a formal put and call agreement covering all the shares Greenberg purchased. On March 25, First City announced publicly for the first time that it intended to make a tender offer for all of Ashland's shares. First City filed a Schedule 13D on March 26. Has First City violated the Williams Act?
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