Pursuant to section 16 (b) of the Securities Exchange Act of 1934 an action was commenced by a shareholder to recover for the corporation profits realized by another shareholder through "short swing" transactions in securities of the corporation, the estimated profits being $50,770. Plaintiff's attorney filed an affidavit stating the reasons why recovery of the full amount was doubtful and made application for , leave to settle and compromise for $5,000. The corporation's attorney agreed to this proposal. Held, the merits of the compromise cannot be considered until in conformance with Rule 23 ( c), actual notice of the compromise and its terms is given to 'the Securities and Exchange Commission and each of the directors, and notice by publication is given to all the shareholders. Pottish v. Divak, (D.C. N.Y. 1947) 71 F. Supp. 737.
Richard. J. Archer,
CORPORATIONS-CLASS ACTIONS UNDER SECTION 16(b) OF THE SECURITIES EXCHANGE ACT OF 1934-FEDERAL RULE 23,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol46/iss1/12