Gratz v. Claughton
United States Court of Appeals for the Second Circuit
187 F.2d 46 (1951)
Relevant factsFree
Claughton (defendant), a corporate director who already owned shares, bought additional shares and then sold some (but not all) of his holdings within six months; Gratz (plaintiff) sued under Section 16(b) to recover his short-swing profits. A special master computed those profits by looking six months before and after the relevant transactions and selecting the purchase-sale matching that yielded the highest possible profit figure.
IssueFree
Whether, in computing a director's profits under Securities Exchange Act Section 16(b), courts match stock sales with stock purchases in whatever way maximizes the profits recoverable by the corporation.