Della,an officer for Energy Petrol Corporation (EPC),buys 100 shares of EPC stock.One week later,EPC announces that it will merge with a competitor,Fuel Oil Company,and the price of EPC stock increases.One month later,Della sells her shares for a profit.Under Section 16(b)of the Securities Exchange Act of 1934,Della would not be liable if,after buying the stock,she had waited

Question

Quizplus · Accepted Answer

Section 16(b) requires any profit earned by an officer, director, or greater-than-10% shareholder from a purchase and sale (or sale and purchase) of a company's stock that occurs within a six-month period to be returned to the company. Therefore, Della would not be liable for any profit earned from selling her shares if she waited more than six months to sell them.

Della,an Officer for Energy Petrol Corporation (EPC),buys 100 Shares of EPC