Fact Pattern 42-1B
Sid,a director of Tech Software Company,learns that a Tech engineer has developed "Ur Call," a new,exciting video game.Sid buys Tech stock and tells his friend Velma,who also buys Tech stock.When the new game is released three weeks later,Sid and Velma sell their stock for a big profit.
-Refer to Fact Pattern 42-1B.Regarding Sid's profits on the purchase and sale of Tech stock,under Section 16(b)of the Securities Exchange Act of 1934 Tech may recapture

Question

Fact Pattern 42-1B 
Sid,a director of Tech Software Company,learns that a Tech engineer has developed "Ur Call," a new,exciting video game.Sid buys Tech stock and tells his friend Velma,who also buys Tech stock.When the new game is released three weeks later,Sid and Velma sell their stock for a big profit.
-Refer to Fact Pattern 42-1B.Regarding Sid's profits on the purchase and sale of Tech stock,under Section 16(b)of the Securities Exchange Act of 1934 Tech may recapture

Quizplus · Accepted Answer

Section 16(b) of the Securities Exchange Act of 1934 requires directors, officers, and 10% shareholders to disgorge any profits they earn from purchasing and selling their company's stock within a period of fewer than six months. In this case, Sid purchased Tech stock and then sold it within three weeks, earning a profit from the new and exciting video game that he learned about as a director. As a result, Tech may recapture all of Sid's profits under Section 16(b).