Donoghue v. Bulldog Investors General Partnership, No. 11-1708 (2d Cir. 2012)Annotate this Case
Defendants appealed from the district court's award to plaintiff, suing on behalf of an issuer of securities, the short-swing profits realized by defendants from trading in the issuer's stock in violation of Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. 78p(b). Defendants challenged plaintiff's constitutional standing to maintain the action, arguing that the proscribed trading caused no actual injury to the issuer to establish a genuine case or controversy. The court concluded that short-swing trading in an issuer's stock by a 10% beneficial owner in violation of Section 16(b) of the Act caused injury to the issuer sufficient for constitutional standing. Accordingly, the court affirmed the judgment.