For the purpose of preventing the unfair use of information that may have been obtained by a beneficial owner of more than 10 percent of a class of an equity security, or by a director or officer by reason of a relationship to a company, the profit realized by the beneficial owner, director, or officer from a purchase and sale, or a sale and purchase, of an equity security of the company within any period of less than six months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company. The profit shall inure to and be recoverable by the company irrespective of the intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold, for a period exceeding six months. Suit to recover the profit may be instituted at law or in equity in the superior court by the company, or by the owner of a security of the company in the name and in behalf of the company if the company fails or refuses to bring a suit within 60 days after request or fails diligently to prosecute the suit. However, a suit to recover profit may not be brought more than two years after the date the profit was realized. This section may not be construed to cover a transaction where the beneficial owner was not a beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or cover a transaction or transactions that the department by regulation may exempt as not comprehended within the purpose of the section.
Section: Previous 21.40.010 21.40.020 21.40.030 21.40.040 21.40.050 21.40.060 21.40.070 21.40.080 NextLast modified: November 15, 2016