concurring in part and dissenting in part:
When reputable and honest businessmen, advised by able and ethical lawyers, are held to have violated a federal statute, the likelihood is that there is something faulty in the statute, the manner in which it is administered, or both. In this case, I believe the fault lies with both. Under the Williams Act, Congress and the SEC have attempted to regulate both purchases and sales of stock with the same set of rules and with an inadequate definition of terms. The result has been less than admirable.
Section 13(d)(1) of the Williams Act, 15 U.S.C. § 78(m)(d)(1), provides that a person who acquires directly or indirectly the beneficial ownership of securities in a class, and thus becomes directly or indirectly the beneficial owner of more than 5% of such class, must file a Schedule 13D statement within ten days of the acquisition. It does not define the term “beneficial owner”. Section 13(d)(3) provides that, when two or more persons act as a group for the purpose of “acquiring, holding, or disposing” of such securities, the group shall be deemed to be a “person”. The group, says Congress, is deemed to have become the beneficial owner of the securities at the time they agree to act in concert. S.Rep.No. 550, 90th Cong., 1st Sess. (1967); H.R.Rep.No. 1711, 90th Cong., 2d Sess. (1968), reprinted in 1968 U.S.Code Cong. & Ad.News 2811, 2818.
The Commission has codified this expressed congressional intent at 17 C.F.R. § 240.13d-5(b)(l):
When two or more persons agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of an issuer, the group formed thereby shall be deemed to have acquired beneficial ownership, for purposes of sections 13(d) and 13(g) of the Act, as of the date of such agreement, of all equity securities of that issuer beneficially owned by any such persons.
The Commission’s definition of beneficial ownership, which postdates the events at issue herein, incorporates “the power to dispose, or to direct the disposition of,” a security. 17 C.F.R. § 240.13d-3(a)(2). However, neither Congress nor the Commission has enlightened us as to how, in the absence of controlling contractual provisions, this incident of beneficial ownership is “deemed” to be exercisable by a group. The record in the instant case does not disclose whether the alleged group was to *369act by majority vote, unanimous vote, or in some other manner. If there was an agreement for the formation of the group, such as we have held to be necessary, Corenco Corp. v. Schiavone & Sons, Inc., 488 F.2d 207, 217 (2d Cir. 1973), we are left completely in the dark as to its pertinent provisions.
My own reading of the record does not satisfy me that Dickinson, Eberstadt, Dunning, and Lufkin had the powers of disposition over stock owned by others which the district court found to exist. For example, the district court’s finding that Eberstadt had the power to make a “binding commitment” to sell the Fund shares is, in my opinion, clearly erroneous. That finding treats the Fund directors as automatons, which they were not, and disregards Eber-stadt’s specific disavowal of the power to assure a sale. In short, if Eberstadt had been sued because it found itself unable to carry out its “binding commitment”, I would have been delighted to be the lawyer handling its defense.
I am also troubled by the absence of evidence concerning:
1. The alleged power of Dickinson and Dunning to control the disposition of stock held in trust where there were co-trustees whose assent was required, see 90 C.J.S. Trusts § 293, at 449;
2. Dickinson’s alleged control over the disposition of stock owned by other members of his family, see Texasgulf, Inc. v. Canada Development Corp., 366 F.Supp. 374, 403 (S.D.Tex.1973);
3. Dunning’s alleged power to dispose of stock held in two trusts of which he was not even a trustee;
4. Lufkin’s alleged control over the investment decisions of a partnership’s managing partner and the sale of stock owned by three shareholders whom Luf-kin had never even met.
Despite this flimsy showing of individual power and control, the district court concluded that all the group members became beneficial owners of the stock involved.
According to the district court, a group was formed, as an entity separate and distinct from its members, many months before the sale of Becton stock to The Sun Co. Within ten days after its formation, the group or its individual members had to file 13D Schedules. 17 C.F.R. §§ 240.13d-1(a), 240.13d-1(f). These Schedules had to be truthful. GAF Corp. v. Milstein, 453 F.2d 709, 720 (2d Cir. 1971), cert. denied, 406 U.S. 1910, 92 S.Ct. 1610, 31 L.Ed.2d 821 (1972). Both overstatement and understatement had to be avoided. Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937, 948 (2d Cir. 1969). Lack of candor might have resulted in civil or criminal liability on the part of group members. 17 C.F.R. § 240.13d-101; see United States v. Newman, 664 F.2d 12, 16 (2d Cir. 1981). More significantly, a misstep in the preparation of a Schedule might have opened the door to the favorite delaying tactic of entrenched management, an application for a temporary injunction. See, e.g., Electronic Specialty Co. v. International Controls Corp., supra, 409 F.2d at 947; Transcon Lines v. A. G. Becker, Inc., 470 F.Supp. 356 (S.D.N.Y.1979); Nicholson File Co. v. H. K. Porter Co., 341 F.Supp. 508, 520 (D.R.I.1972).
The filing requirement was designed to identify the group “obtaining the benefits of ownership ... by reason of any contract, understanding, relationship, agreement or other arrangement.” S.Rep.No. 550, supra, at 8. Unlike my colleagues, I am at a loss to know how, in April 1977, the group members could have disclosed the group’s method of acquiring ownership (17 C.F.R. § 240.-13d-101, Item 3) so that the disclosure would not have been simply an invitation to litigation. I wonder, for example, how the shareholders of Chemical Fund would have reacted to a pronouncement by Mr. Lufkin that, as a group member, he had become one of the beneficial owners of the Fund’s 413,200 shares of Becton stock. Texasgulf, Inc. v. Canada Development Corp., supra, 366 F.Supp. at 403. I wonder what would have happened had Dr. Dunning stated that, although neither he nor Mr. Lufkin was acquainted with Robert Smith, Dr. Dunning nonetheless had become a beneficial owner of Mr. Smith’s Becton stock. I *370wonder if Becton management would have sat idle in the face of a group claim that it was the beneficial owner of stock held in trust by trustees having no association whatever with the group. I think management’s reaction would have been one of amazement and would have prompted it to head happily for the nearest court of equity-.
The Williams Act was not designed to tip the balance of regulation in favor of management. Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 58-59, 95 S.Ct. 2069, 2075-76, 45 L.Ed.2d 12 (1975). Neither was it designed to provide the SEC with an amorphous regulatory power, the boundaries of which preclude definition by the most skilled of attorneys. The SEC’s bland statement in its brief that, even though Eberstadt represented the Fund as well as Mr. Dickinson, there was no “need” to hold the Fund liable, is a prime example of such unfathomable regulation.
With all due respect to my learned colleagues, I cannot join them in affirming a decision that unjustifiably has besmirched an honorable name. I would reverse the district court’s holding that appellant Dickinson violated section 13(d) of the Securities Exchange Act. I agree with my colleagues that the balance of the district court’s judgment should be affirmed.