Volk v. Zlotoff

OPINION

HERLANDS, District Judge:

Defendants’ motion for summary judgment presents a novel and important question under the “short-swing” profits provision of the Securities Exchange Act of 1934: whether a mutual rescission of the exercise of a stock purchase option may immunize a transaction against liability under Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b). 1 We hold that it does not.

Plaintiff, a shareholder of Yoo-Hoo Chocolate Beverage Corporation (hereafter Yoo-Hoo), commenced this action on October 19, 1967 to recover “short-swing” profits from three…