Olagues v. Perceptive Advisors LLC

Gerard E. Lynch, Circuit Judge:

Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78p(b), requires that certain defined "insiders" of an issuer of securities disgorge any profits derived from short-swing trades in those securities. Courts have generally read the statute, a strict-liability restriction on insider trading, precisely and mechanically according to its express terms. But litigants have increasingly called on this Court, with some success, to apply Section 16(b) in flexible ways to keep pace with an ever-changing financial system. We have been…