Short swing: Difference between revisions
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I described the rule in more detail, and included a legal citation to its statutory source. |
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{{Orphan|date=November 2006}} |
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A '''short swing''' rule restricts [[officer]]s and insiders from making short-term profits at the expense of the firm. The rule |
A '''short swing''' rule restricts [[officer]]s and insiders from making short-term profits at the expense of the firm. It is a prophylactic measure intended to guard against so-called insider trading. See William A. Klein et al., Business Associations, 511 (6th ed. Foundation Press)(2006). The rule mandates that if an officer, director, or any shareholder holding more than 10% of outstanding shares of a [[publicly traded]] company makes a profit on a transaction with respect to the company's stock during a given six month period, that officer, director, or shareholder must pay the difference back to the company. |
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The statutory text of the rule can be found at section 16(b) of the Securities Exchange Act of 1934, codified at 15 U.S.C. section 78p(b). |
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{{unreferenced|date=June 2007}} |
{{unreferenced|date=June 2007}} |
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Revision as of 22:22, 16 October 2008
A short swing rule restricts officers and insiders from making short-term profits at the expense of the firm. It is a prophylactic measure intended to guard against so-called insider trading. See William A. Klein et al., Business Associations, 511 (6th ed. Foundation Press)(2006). The rule mandates that if an officer, director, or any shareholder holding more than 10% of outstanding shares of a publicly traded company makes a profit on a transaction with respect to the company's stock during a given six month period, that officer, director, or shareholder must pay the difference back to the company. The statutory text of the rule can be found at section 16(b) of the Securities Exchange Act of 1934, codified at 15 U.S.C. section 78p(b).
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