Karin, an officer for LNG Corporation, buys 10,000 shares of its stock. One week later, LNG announces that it will merge with a competitor, Mining & Piping Company, and the price of LNG stock increases. One month later, Karin sells her shares for a profit. Under Section 16(b) of the Securities Exchange Act of 1934, Karin would not be liable if, after buying the stock, she had waited

Question

Karin, an officer for LNG Corporation, buys 10,000 shares of its stock. One week later, LNG announces that it will merge with a competitor, Mining & Piping Company, and the price of LNG stock increases. One month later, Karin sells her shares for a profit. Under Section 16(b) of the Securities Exchange Act of 1934, Karin would not be liable if, after buying the stock, she had waited​

Quizplus · Accepted Answer

Section 16(b) of the Securities Exchange Act of 1934 requires that officers and directors of a company must hold their shares for at least six months before selling them for a profit. Therefore, Karin would not be liable if she had waited for more than six months to sell her shares.

Karin, an Officer for LNG Corporation, Buys 10,000 Shares of Its