H. F. Ahmanson & Co. was the controlling shareholder of United Savings and Loan Association. There was very little trading in the Association's shares, however. To create a public market for their shares, Ahmanson and a few other shareholders of the Association incorporated United Financial Corporation and exchanged each of their Association shares for United shares. United then owned more than 85 percent of the shares of the Association. The minority shareholders of the Association were not given an opportunity to exchange their shares. United made two public offerings of its shares. As a result, trading in United shares was very active, while sales of Association shares decreased to half of the formerly low level, with United as virtually the only purchaser. United offered to purchase Association shares from the minority shareholders for $1,100 per share. Some of the minority shareholders accepted this offer. At that time, the shares held by the majority shareholders were worth $3,700. United also caused the Association to decrease its dividend payments. Has Ahmanson done anything wrong?
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