423 U.S. 232 (1976)
The case presented a statutory interpretation issue involving a provision in the Securities Exchange Act of 1934 (Act), 15 U.S.C.S. § 78p(b), which was designed to prevent corporate insiders from profiteering through short-swing securities transactions on the basis of inside information. The Act provided that a corporation could recapture profits realized on a purchase and sale of its securities within six months by beneficial owners of more than 10 percent of the stock, except that it did not apply where the beneficial owner was not such both at the time of the purchase and sale of the security involved.
The question presented in was whether respondent purchaser, who had put his holdings above the 10 percent level as a result of the purchase, was a beneficial owner at the time of the purchase.
- The appellate court answered this question in the negative, and the United States Supreme Court affirmed.
- It agreed with the appellate court that, in a purchase-sale sequence, the statute's exemption of those who were not beneficial owners at the time of the purchase had to be construed to refer to those who were not beneficial owners prior to the time when the decision to purchase was made.
The Court affirmed the decision.
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