Securities Law Commons^™

Corporations - Securities: Regulation - Parent Corporation As Insider Realizing Shortswing Profit, Allan L. Bioff

Michigan Law Review

Parent corporation, owning a majority of the outstanding voting securities of its subsidiary, sold 120,000 shares of the subsidiary's common stock. A substantial shortswing profit was realized on 4115 shares which had been purchased on the open market five months earlier. The sale, whereby the parent was to divest itself of control of its subsidiary, was made pursuant to an agreement between both companies and approved by a majority of the voting stock of each. Section 16 (b) of the Securities Exchange Act of 1934 provides that officers, directors and beneficial owners of more than ten percent of any class …