InsidersTradesSigma
Insider Trading & Regulation
Section 16(b) rule forcing a corporate insider to surrender any profit realised on a purchase and a sale of company stock within a six-month window.
The rule is mechanical and strict-liability: intent and possession of inside information are irrelevant. Any matchable purchase and sale within six months yields recoverable profit, computed to maximise the disgorgement. It is why insiders who buy on the open market rarely flip quickly, which makes an open-market purchase a more durable conviction signal.