Effective 28 Aug 1965

375.423. Company may recover profits realized by officer or director in certain transactions — exceptions. — For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his relationship to such company, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and on behalf of the company if the company shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the suit thereafter; but no such suit shall be brought more than two years after the date the profit was realized. This section shall not be construed to cover any transaction where the beneficial owner of the equity security involved was not the owner both at the time of the purchase and sale, or the sale and purchase, or any transaction or transactions which the director by rules and regulations may exempt as not comprehended within the purpose of this section.

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(L. 1965 p. 575 § 2)