2nd Circ. Raises Bar For Short-Swing Insider Trading Claims

Law360, New York (January 7, 2013, 2:37 PM EST) -- Federal securities laws do not require executives to disgorge trading profits earned from buying and quickly selling shares of different types of stock in the same company, the Second Circuit ruled Monday in a precedential opinion.

A three-judge panel said the Securities and Exchange Act of 1934 did not allow a plaintiff to seek disgorgement from corporate insiders who buy shares in a company and then sell a different type of shares within six months, resulting in so-called short swing profits. The decision affirmed a New...
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