Reliance Elec. Co. v. Emerson Elec. Co. - 404 U.S. 418 (1972)
U.S. Supreme Court
Reliance Elec. Co. v. Emerson Elec. Co., 404 U.S. 418 (1972)
Reliance Electric Co. v. Emerson Electric Co.
Argued November 111, 1971
Decided January 11, 1972
404 U.S. 418
Respondent, the owner of more than 10% of Dodge Mfg. Co.'s stock, within six months of the purchase thereof sold enough shares to a broker to reduce its holding to 9.96%, for the purpose of immunizing the disposal of the remainder from liability under § 16(b) of the Securities Exchange Act of 1934. Under that provision, a corporation may recover for itself the profits realized by an owner of more than 10% of its shares from a purchase and sale of its stock within any six-month period, provided the owner held more than 10% "both at the time of purchase and sale."
Held: Under the terms of § 16(b), respondent is not liable to petitioner (Dodge's successor) for profits derived from the sale of the 9.96% to Dodge within six months of purchase. Pp. 422-427.
434 F.2d 918, affirmed.
STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and MARSHALL and BLACKMUN, JJ., joined. DOUGLAS, J., filed a dissenting opinion, in which BRENNAN and WHITE, JJ., joined, post, p. 404 U. S. 427. POWELL and REHNQUIST, JJ., took no part in the consideration or decision of the case.