Gratz v. Claughton

187 F.2d 46, cert. denied 341 U.S. 920, 71 S.Ct. 741, 95 L.Ed. 1353 (1951)

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Gratz v. Claughton

United States Court of Appeals for the Second Circuit
187 F.2d 46, cert. denied 341 U.S. 920, 71 S.Ct. 741, 95 L.Ed. 1353 (1951)

  • Written by John Caddell, JD

Facts

Claughton (defendant) was a director of a corporation. Claughton owned shares of the corporation. Claughton bought more shares of the corporation and then sold some shares within six months of the purchase. Gratz (plaintiff) sued Claughton for violation of section 16(b) of the Securities Exchange Act of 1934. A special master computed Claughton’s profits by looking six months back from and six months ahead of Claughton’s purchase and sale of the stock, and taking the highest possible profits based on Claughton’s stock ownership during that time period. Claughton appealed.

Rule of Law

Issue

Holding and Reasoning (Hand, C.J.)

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