LAW 3111H Study Guide - Final Guide: Securities Exchange Act Of 1934
Section 16
Statutory issue: “This subsection shall not be construed to cover any transaction
where such beneficial owner was not such
both at the time of the purchase and sale
,
or the sale and purchase, of the security involved”
matchable purchase and a sale | one on both sides within 6 months
have to be 10% owner before u bought and sold
and 10% after u bought or sold
Example 1:
Bill is the Chief Executive Officer at ACME inc. ACME is a corporation registered
under the 1934 Act and has 1,000,000 outstanding shares. On January 1, Bill
purchased 200,000 shares of ACME stock for $10 per share. Determine his liability if
any under 16(b):
•Jan 1: Purchases 200,000 shares @ $10
•May 1: Sells 200,000 @ $50
•Liability?
• CEO = he is an officer (or director)
stock percentage is irrelevant
on the hook
2) look @ dates
within 6 months purchase and sale
3)
