§ 27-1-30 — § 27-1-30. Liability of directors, officers, and shareholders.

§ 27-1-30. Liability of directors, officers, and shareholders.

For the purpose of preventing the unfair use of information that may have been obtained by a beneficial owner, director, or officer by reason of their relationship to the company, any profit realized by them from any purchase and sale, or any sale and purchase, of any equity security of the company within any period of less than six (6) months, unless the 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 the beneficial owner, director, or officer in entering into a transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six (6) months. An action to recover 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 fails or refuses to bring the action within sixty (60) days after request or fails diligently to prosecute the action, but no action shall be brought more than two (2) years after the date the profit was realized. This section shall not be construed to cover any transaction where the beneficial owner was not the beneficial owner, both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions that the commissioner by rules and regulations may exempt as not comprehended within the purpose of this section.

Legislative History

P.L. 1965, ch. 101, § 1.