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Securities Law Commons

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Michigan Law Review

Insider trading

1966

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Full-Text Articles in Securities Law

Convertible Securities And Section 16(B): The Persistent Problems Of Purchase, Sale, And Debts Previously Contracted, W. Richard Keller Jan 1966

Convertible Securities And Section 16(B): The Persistent Problems Of Purchase, Sale, And Debts Previously Contracted, W. Richard Keller

Michigan Law Review

In 1934, Congress enacted section 16(b) of the Securities Exchange Act in an effort to counteract the evils flowing from speculation in corporate securities by certain persons having information regarding the corporation's affairs or occupying positions of trust which permit manipulation of corporate policies. In general, section 16(b) permits the issuer, or one or more stockholders acting in its behalf, to recover any "short-swing" profit realized from purchases and sales (or sales and purchases) of the issuer's equity securities within a six-month period by directors, officers, or beneficial owners of more than ten per cent of any class of equity …