Rereading Section 16(B) of the Securities Exchange Act

43 Pages Posted: 1 Nov 2008  

Karl S. Okamoto

Drexel University Thomas R. Kline School of Law

Abstract

This Article suggests a rereading of section 16(b)of the Securities Exchange Act of 1934. The rereading is based on a new statement of the provision's purpose. Although largely unquestioned, the conventional statement of purpose has led the reading of the section astray. The new statement of purpose offered here finds its theoretical and empirical foundation in modern finance economics. The new purpose also reads the statute in light of the historical context of its adoption. It reads the statute as a response to the types of market abuses which incited the public outcry for federal securities legislation in the early 1930s. Above all, a new reading of section 16(b) allows the statute to make better sense.

Suggested Citation

Okamoto, Karl S., Rereading Section 16(B) of the Securities Exchange Act. Georgia Law Review, Vol. 27, No. 1, 1992; Drexel College of Law Research Paper No. 2009-A-01. Available at SSRN: https://ssrn.com/abstract=1023647

Karl S. Okamoto (Contact Author)

Drexel University Thomas R. Kline School of Law ( email )

3320 Market Street
Philadelphia, PA 19104
United States

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