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Second Circuit Review: Court Adopts Bifurcated Approach to Treatment of Hybrid Securities
June 29, 2012
Litigation partners Marty Flumenbaum and Brad Karp's Second Circuit Review column appeared in the June 27 issue of the New York Law Journal. In this article, the authors discuss Analytical Surveys v. Tonga Partners, in which the U.S. Court of Appeals for the Second Circuit affirmed the district court's finding of liability for short-swing insider trading. The Second Circuit's decision provides some helpful clarifications regarding the debt and borderline transaction exceptions under Section 16(b) of the Securities Exchange Act to prohibitions of short-swing insider trading and resolves disagreement within the district courts about the proper treatment of hybrid securities under the Act.