United States Second Circuit

In a shareholder derivative action seeking disgorgement of short-swing profits realized by two limited partnerships that were beneficial owners of more than 10 percent of the shares of the issuer, the district court's grant of summary judgment in favor of the plaintiff is affirmed, where: 1) the stock purchases were not exempt from Section 16(b) of the Securities Exchange Act of 1934 or SEC Rule 16b-3(d) even though they were made at the issuer's request and with the board’s approval; and 2) under the definition of "person" in Section 16(b) and basic principles of agency law, the limited partnerships were beneficial owners for the purposes of determining ten percent holder status under Section 16(b), notwithstanding their delegation of voting and investment control over their securities portfolios to their general partners' agents.

Appellate Information

• Decided 01/20/2012
• Published 01/20/2012

Judges

• Barrington D. Parker

Court

• United States Second Circuit

Counsel

• For Appellant:
  
• Daniel E. Doherty, Thomas E. Redburn, Jr.