United States Second Circuit

Dismissal of derivative action brought under section 16(b) of the Securities Exchange Act of 1934 for disgorgement of short-swing profits from stock sales made by one defendant as part of an alleged "group" within the meaning of the Act, is vacated as to claim against individual defendant where: 1) individual and corporate defendant acted as a group for purposes of acquiring shares of corporate plaintiff; 2) defendants' disclaimers of group activity were not entitled to evidentiary weight in the consideration of Rule 12(b)(6) motions; and 3) individual's sales of his shares were not a basis for concluding that the "group" provisions no longer applied.

Appellate Information

• Decided 06/06/2007
• Published 06/06/2007

Judges

• KEARSE, Circuit Judge., Before:  KEARSE, CABRANES, and KATZMANN, Circuit Judges.

Court

• United States Second Circuit

Counsel

• For Appellant:
  
• Paul D. Wexler, New York, N.Y. (Bragar Wexler & Eagel, New York, NY, Ostrager Chong Flaherty & Broitman, New York, NY, on the brief), for Plaintiff-Appellant.


• For Appellees:
  
• Allan T. Slagel, Chicago, IL (Heather A. Jackson, Shefsky & Froelich, Chicago, IL, John J. Clarke, Jr., DLA Piper RudnickGray Cary, New York, NY, on the brief), for Defendant-Appellee Jennings., Thomas E. Lynch, New York, N.Y. (Steven C. Bennett, Jones Day, New York, NY, on the brief), for Defendant-Appellee European Metal Recycling, Ltd.