Joseph Crotty was a vice president of United Artists Communications, Inc. (UA), a corporation with equity securities registered under the Securities Exchange Act of 1934. Crotty was the head film buyer of UA's western division. He had virtually complete and autonomous control of film buying for the 351 UA theaters in the western United States, including negotiating and signing movie acquisition agreements, supervising movie distribution, and settling contracts after the movies had been shown. Crotty knew how many contracts were being negotiated at any one time and the price UA was paying for the rental of each movie. Crotty was required to consult with higher officers only if he wanted to exceed a certain limit on the amount of the cash advance paid to a distributor for a movie. This occurred no more than two or three times a year. The gross revenue from Crotty's division was about 35 percent of UA's gross revenue from movie exhibitions and around 17 percent of its total gross revenue. During a six-month period, Crotty purchased 7,500 shares of UA and sold 3,500 shares, realizing a large profit. Has Crotty violated Section 16(b) of the 1934 Act?
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