Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

Some concepts learned in law school actually come up often when working in house.  Take for example, laws on insider trading.  All the study for the bar exam on Section 16(b) comes into play when asked to prepare Form 4 filings for officers and directors with the SEC. 

Section 16(b) provides that directors, officers and ten-percent shareholders shall not purchase and sell equity securities or sell and purchase securities within a six-month period. Section 16(b) applies when the company has 500 shareholders and $10,000,000 in assets or more shareholders in any outstanding class, or is traded on a national exchange. The law is a strict liability law.  If there is a violation, the director, officer, ten percent shareholder is required to disgorge the profits made.