Securities Exchange Act of 1934—Section 16(b)—Archived Article

October 2004

Many policy forms contain exclusionary language relating to Section 16(b) of the Securities Exchange Act of 1934 (and similar state statutory laws), which deals with the use for personal gain of “insider information” by the firm's directors and officers or by shareholders owning more than 10 percent of the corporation's stock. This D&O insurance policy exclusion sometimes is referred to as the short-swing-profits exclusion.

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