Section 16(b) of the Securities Exchange Act of 1934 ("Section 16(b)") was designed to curb insider trading leading to "sure thing" profits at the expense of individual stockholders and "to protect the securities markets from untoward influences." A series of cases over the years has explored various aspects of Section 16(b) such as: what is a purchase and sale; who is an issuer; who are beneficial owners; and limits of the statute's purposes. However, one aspect of Section16(b) not fully elucidated by case law is the question of standing. In deciding who has standing when an issuer corporation is extinguished in a merger, Lewis v. McAdam, a 1985 Ninth Circuit case, interpreted standing narrowly, limiting standing to the issuer or holders of securities of the issuer. This note examines how the Lewis decision, in contrast to Blau v. Oppenheim, reached its result, and how that result fulfills the purpose of Section 16(b).
13 J. of Contemp. L. 355 (1987).