Another of the Firm’s prominent cases from the 1960s was the $150 million “Salad Oil Scandal.” called the scandal “the greatest swindle of our time.” White & Case represented Continental Illinois National Bank & Trust, the largest creditor in the case, with $20 million of outstanding loans. The scandal centered on the activities of a vegetable oil dealer and former butcher named Anthony “Tino” De Angelis, whose company, Allied Crude Vegetable Oil Refining Corporation, purchased and refined cottonseed and soybean oil, which it supposedly stored at a tank farm in Bayonne, New Jersey. Using a twisted kind of business aptitude, together with his charm, De Angelis cheated some of the most financially sophisticated companies in the United States and Europe. He retained American Express Field Warehousing Corporation, a subsidiary of American Express Company, to issue warehouse receipts certifying the existence of the oil. He then used those receipts to finance his inventories with Continental Illinois, Chase Manhattan, Bunge Corporation and other banks and vegetable oil exporters. In addition, he bought and sold commodity contracts through Ira Haupt & Co., a prestigious, old-line member of the New York Stock Exchange.

The scandal broke in November 1963, when the price of vegetable oil fell. Out of the blue, De Angelis’s company filed for bankruptcy, in turn triggering the bankruptcy of Haupt, the first NYSE member firm to declare insolvency since the Great Depression.

Colonel Hartfield was also responsible for bringing into the Firm another exceptional lawyer, Orison Marden, whose mother he knew from Kentucky. Marden first worked for White & Case while continuing his studies at New York University Law School at night, left the Firm for a year to study law full-time and, upon receiving his LL.B. in 1929, returned to White & Case as an associate in the litigation department. It took an additional 17 years before he was made partner, but that was not unusual for that time. Due to the impact of the Great Depression and World War II, some newly graduated lawyers who joined the Firm in the late 1920s and 1930s had to wait as long as 20 years or more to get the call. Not that Marden complained. He loved the law and felt lucky simply to be part of a firm like White & Case. In 1973, looking back on the initial years of his career, he wrote, “Having chosen litigation as my preferred field, I spent a good deal of time answering calendars for older lawyers and arguing simple motions. Litigation was far more technical in 1930 than it is today. The preparation of a complaint or answer that would withstand attack was considered an important measure of a lawyer’s competence. Technical motions addressed to the pleadings were resorted to with great enthusiasm and adverse rulings were promptly appealed. Most litigation was conducted in the state courts. In 1930 there were only nine U.S. district judges in the Southern District of New York.” He also wrote, “Practicing law was fun for me from the very start. I enjoyed the satisfaction of putting together a brief or memorandum of which I could be proud. It was no chore for me to answer the calendar or to carry to court the litigation file and my senior’s brief case. To be associated with a group of top-notch lawyers was, for me, a priceless opportunity. And every now and then there was the thrill of winning a motion or an appeal.” Marden led the Firm’s representation of its client, Texas Gulf Sulphur, in its defense of a claim brought by the SEC. This was a landmark in U.S. securities law, a highly complex case that Marden later described as his unhappiest defeat as a lawyer. The case helped establish the ground rules under which corporate insiders may or may not buy or sell stock in their company. Prior to Texas Gulf, companies were sometimes careless in the ways in which they disclosed material information and monitored insider trading. After Texas Gulf, they could no longer afford to be haphazard. The events leading up to began in November 1963, when the company’s geologists made a potentially important mineral discovery in Timmins, Ontario based on a single drill hole. Rather than continue to drill and risk attracting the attention of other companies, Texas Gulf temporarily suspended its exploration program at the site and began buying the mineral rights to surrounding properties before land prices were bid up. In a further effort to preserve the secrecy of the find, Texas Gulf’s president, Claude Stephens, directed that no public announcement be made and that the company’s board of directors not be informed of the discovery until it had been verified and more fully delineated. Land acquisition was completed four months later, in March 1964, and drilling was resumed at the end of that month. Meanwhile, some Texas Gulf employees, officers and directors bought stock. The initial purchases were made in November 1963 by geologists in Timmins. Several officers and directors purchased shares in the ensuing months, and in February 1964 the company awarded stock options to key officers as part of its regular option program. The SEC later alleged that not only did the cash purchases violate insider trading rules, but so did the options because, in the SEC’s view, they should not have been awarded while the Timmins drill results were still under wraps. Word of the discovery finally reached the public on April 11, 1964, when the and reported rumors of a large mineral find in Ontario. Under pressure to say something, but not yet ready to divulge the details, Texas Gulf issued a press release the following day, which seemed to downplay the discovery. Just four days later, however, the company held a press conference at which it confirmed the discovery to be one of the largest copper finds in Ontario history. In 1965, the SEC filed civil charges alleging that the April 12 press release was misleading and fraudulent. Concurrently, the SEC charged 12 individuals with insider trading in the stock prior to the disclosure of the Timmins mineral find in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. “Texas Gulf officials defended themselves,” reported, “by saying that the early indications of the ore strike did not necessarily mean that a commercial body of minerals existed and that, therefore, the first ore samples did not comprise material facts that needed to be disclosed.” The trial judge agreed with the company, dismissing all charges against Texas Gulf and against all but two of the individual defendants. The only two who were found to have violated the law had bought stock shortly before the April 16 press conference. On appeal, a Second Circuit panel overturned the trial judge’s ruling in nearly every regard. It found most of the individual defendants guilty of illegal insider trading, ordered the rescission of the February stock options and ruled the press release to have been deceptive. The majority opinion, written by Judge Sterry R. Waterman, stated, “The core of Rule 10b-5 is the implementation of the Congressional purpose that all investors should have equal access to the rewards of participation in securities transactions. The insiders here were not trading on an equal footing with the outside investors. They alone were in a position to evaluate the probability and magnitude of what seemed from the outset to be a major ore strike; they alone could invest safely, secure in the expectation that the price of TGS stock would rise substantially in the event such a major strike should materialize, but would decline little, if at all, in the event of failure, for the public, ignorant at the outset of the favorable probabilities would likewise be unaware of the unproductive exploration, and the additional exploration costs would not significantly affect TGS market prices. Such inequities based upon unequal access to knowledge should not be shrugged off as inevitable in our way of life, or, in view of the congressional concern in the area, remain uncorrected.” The U.S. Supreme Court declined to review the case. While the appeals court’s opinion is widely accepted today, at the time it was confusing and even shocking to lawyers, directors and corporate executives. observed, “The issue raised by the Texas Gulf case and by some other recent securities cases is just how much corporate information should be released to the public. The legal profession, Wall Street and the business community foresee serious problems in complying with the law, because they are uncertain what the new disclosure rules may be.” Although the result may not have gone the Firm’s client’s way, it was nonetheless a landmark case and continued to mark White & Case as a top litigation firm. Among other important cases, the Firm defended U.S. Steel in a series of antitrust cases and Douglas Aircraft Company in a major shareholder class-action lawsuit.

By the end of the 1970s White & Case had developed strong financial institution, corporate and litigation practices and gained an outstanding reputation as a leading law firm in the United States—stronger and more outstanding, perhaps, than its co-founders ever dreamed. And it was also beginning to distinguish itself from its competitor law firms by engaging in early international activity that would prove to be invaluable to the Firm when it began in the early 1980s to transform itself into a leading global law firm.