Section 16 Insider

For the most part determining your section 16 officers is a fairly routine matter and the sec respects and rarely challenges these determinations due to their fact sensitive nature.

Section 16 insider. The highest sale price will be matched against the lowest purchase within that period to determine if the insider received s hort swing profits this formula can result in deemed profits even if the insider lost money on the transactions. Less than six months will result in matchable transactions under section 16. Archives transcripts of our webcasts.

Section 16 insider means an officer or director of the corporation subject to the short swing profit liabilities of section 16 of the securities exchange act of 1934 as amended. Section 16 of the exchange act extends beyond traditional insiders i e officers and directors to include every person who is directly or indirectly the beneficial owner of more than 10. Section 16 insider any director executive officer or beneficial owner of greater than 10 of a class of registered equity securities of a public company.

Section 16 imposes filing standards for insiders insiders are any officers directors or stockholders who possess stock that directly or indirectly results in beneficial ownership of more than. Section 16 also establishes mechanisms for a company to recover short swing profits or profits an insider realizes from a purchase and sale of the company s security that occur within a six month period. The sec recently made such a challenge however and lost in a federal court case involving a company s conclusions regarding its own officers.

These people are subject to ownership reporting obligations and trading limitations under section 16. An insider who purchases units consisting of common stock and debentures of the insider s company must file a section 16 a report covering the acquisition of the stock. Section 16 q a forum moderated by alan dye a place for practitioners to raise questions share practices and stay on top of developments.