Section 16(b) of the Exchange Act
Section 16(b) of the Securities Exchange Act of 1934 requires insiders to disgorge profits realized from short-swing trades—purchases and sales of the issuer's equity securities within six months. It applies to officers, directors, and beneficial owners of more than 10% of a class of registered equity securities.
Example: Example: An officer executes a purchase of 1,000 shares on January 3 and a sale on June 28; the profit from that trade pair would be subject to disgorgement under Section 16(b).
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