Question: Between December 4 and December 17, John Malone, a director and large shareholder of Discovery Communications, Inc. (Discovery), engaged in sales of Discovery's Series C

Between December 4 and December 17, John Malone, a director and large shareholder of Discovery Communications, Inc. ("Discovery"), engaged in sales of Discovery's "Series C" stock totaling 953,506 shares and purchases of Discovery's "Series A" stock totaling 632,700 shares. Discovery's Series A stock and Series C stock are different equity securities, are separately registered, and are traded separately on the NASDAQ stock exchange under the ticker symbols DISCA and DISCK, respectively. The principal difference between the two securities is that Series A stock comes with voting rights whereas Series C stock does not confer any voting rights. Series A stock and Series C stock are not convertible into each other. A shareholder brought a shareholder suit seeking disgorgement of the profits that Malone realized from these transactions. Explain whether the plaintiff should succeed?

Step by Step Solution

3.34 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The plaintiff should not succeed An insiders purchase and sale of shares of different types of stock in the same company does not trigger liability under 16b of the 1934 Act where those securities are ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1272-L-B-L-I-C-B(503).docx

120 KBs Word File

Students Have Also Explored These Related Business Law Questions!