Ostrager Chong Flaherty & Broitman P.C.


Recovery of Short Swing Profits Under Section 16(b)

Roth v. Foris Ventures, LLC, 21 Civ. 4288 (YRG) (N.D. Cal. June 13, 2022).

Plaintiff filed this derivative action on behalf of Amyris under Section 16(b) of the Securities Exchange Act of 1934, to recover “short-swing†profits obtained by the Defendants from purchases and sales of Amyris Common Stock and derivative securities relating to the Common Stock.

Defendants moved to dismiss arguing that transactions in derivative securities, including amendments and cancellation/regrants of the warrants did not constitute purchases and sales under Section 16(b).

In an Order dated June 13, 2022, the District denied Defendants’ motion holding that Section 16(b) applies to acquisitions and dispositions of equity securities in transactions such as conversions, options, stock warrants, and reclassifications. (citing, Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 43 (2d Cir. 2012), cert. denied, 569 U.S. 918 (2013). The Court also rejected affirmative defenses under SEC Rule 16b-3, and the unorthodox transaction doctrine.