William O. Douglas

“ We should hold that there was only one sale-a plan of distribution conceived 'at the time' Emerson owned 13.2% of the Dodge stock, and implemented within six months of a matching purchase. Moreover, in the spirit of the Act we should presume that any such 'split-sale' by a more-than-10% owner was part of a single plan of disposition for purposes of § 16 (b) liability.
This construction of 'the sequence of relevant transactions,' Bershad v. McDonough, 428 F.2d 693, 697 (CA7) , is not foreclosed by any language in the statute. ”

“ Klune, 178 F.2d 872 (CA2) , cited by the majority, the court permitted a factual inquiry into the possibility that an individual might be a 'de facto' officer or director, although not formally labeled as such. Virtually all courts faced with § 16 (b) problems now inquire into the opportunity for abuse inherent in a particular type of transaction, in order to see if applying the statute would serve its purposes. ”

“ Such a rule would not, moreover, import questions of 'intent' into the statutory scheme. Any factual inquiry would involve only on objective analysis of the circumstances of the various dispositions in the series, applying the 'various tests' established by the cases 'to determine whether a transaction, objectively defined, falls within or without the terms of the statute.' Ante, at 424, n. 4. ”

“ This analysis is equally applicable to the reporting requirements of ex-10% owners.
Second, the Court analogizes Emerson's 'plan' to a sale 'conceived' during the six-month period but not made until after the expiration of the statutory limitation. The Court incorrectly assumes that such a sale could not fall within § 16 (b) . If the 'conception' were sufficiently concrete to be construed as a 'contract to sell,' or an 'option,' there would indeed be liability. ”

“ Insiders have come to recognize that 'in order not to defeat (§ 16 (b) 's) avowed objective,' federal courts will resolve 'all doubts and ambiguities against insiders.' Blau v. Oppenheim, D.C., 250 F.Supp. ”

“ Notes
↑ 15 U.S.C. § 78p (b) :↑ 'Next comes the everlasting problem of protecting the fellow on the outside from the insider . . . That is, the problem of protecting the stockholder-and every fellow who buys into the market is a stockholder-who does not know as much about the company as the fellow on the inside. ”

“ These abuses were perpetrated by such ostensibly reliable men and institutions as Richard Whitney, President of the New York Stock Exchange, [4] Albert H. Wiggin and the Chase National Bank, of which he was the chief executive officer, [5] and Charles E. Mitchell and the National City Bank, of which he was Chairman of the Board. [6]
Section 16 (b) was drafted to combat these 'predatory operations,' S.Rep.No. 1455, supra, at 68, by removing all possibility of profit from those short-swing insider trades occurring within the statutory period of six months. ”