Section 16(B) of the Securities Exchange Act: An Analysis of the Time When Insider Status is Required
24 Pages Posted: 19 Aug 2012
Date Written: August 18, 1976
The Securities Exchange Act of 1934 (Act) was designed to correct many of the financial practices that were commonly thought to be substantial contributing factors to the market debacle of 1929 and the ensuing depression. Section 16 was intended to prevent certain types of predatory speculation by corporate insiders. Section 16(a) requires that every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of equity security registered pursuant to section 12, or who is a director or officer of the issuer of such security, file reports of his or her beneficial ownership of equity securities and any changes therein with the Securities and Exchange Commission (SEC) and any exchange on which the security is listed. Section 16(b) further provides.
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