Insider Trading: The Issuer’s Disposition of an Alleged 16 (b) Violation

When corporate officers are apprised of possible 16(b) liability on the part of a fellow insider, an appropriate reaction by them encompasses both practical and legal considerations. In this comment non-legal factors influencing managerial judgments are related to precepts applied by courts in resolution of 16(b) claims. A detailed investigation is made into the status of the common law Business Judgment Rule in the context of insider trading