The following excerpt is from Kersh v. General Council of Assemblies of God, 804 F.2d 546 (9th Cir. 1986):
2 While Christoffel states the rule that a "controlling person" must have "power" or "influence" over the controlled person, it does not define "power" or "influence." While in Christoffel the defendant brokerage house had no legal authority to compel a guardian (the company's employee) to make particular investments on behalf of a trust, the plaintiff argued that the defendant "controlled" the guardian because it could have refused to hire him, and because it could have influenced him by using its authority as his employer to discourage him from making improvident investments. Without discussing the plaintiff's contention, we affirmed judgment in favor of the brokerage house because of the absence of evidence indicating that the brokerage house "culpably participated" in the illegal transactions, a second prong in the definition of "controlling person." Cf. Zweig v. Hearst Corp., 521 F.2d 1129, 1132 (9th Cir.) (holding that newspaper was a "controlling person" and thus potentially liable under section 20(a) for the acts of one of its employees), cert. denied, 423 U.S. 1025, 96 S.Ct. 469, 46 L.Ed.2d 399 (1975).
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