An insider is liable for "short-swing" profits,even if he/she has not used inside information.

Question

Quizplus · Accepted Answer

The concept of short-swing profits refers to profits made by a company insider (such as a director, officer, or significant shareholder) from buying and selling company securities within a six-month period. The Securities and Exchange Commission (SEC) imposes liability for these profits regardless of whether the insider used inside information to make the trades. This is because the SEC considers the ability to make short-swing profits to be a potential incentive for insiders to engage in unethical behavior or abuse their positions of trust. Therefore, any insider who engages in short-swing trades must disgorge any profits made during the six-month period to the company.

An Insider Is Liable for "Short-Swing" Profits,even If He/she Has