§ 27-1-30 - Liability of directors, officers, and shareholders. - Rhode Island Statutes

SECTION 27-1-30

   § 27-1-30  Liability of directors,officers, and shareholders. – For the purpose of preventing the unfair use of information which may have beenobtained by a beneficial owner, director, or officer by reason of his or herrelationship to the company, any profit realized by him or her from anypurchase and sale, or any sale and purchase, of any equity security of thecompany within any period of less than six (6) months, unless the security wasacquired in good faith in connection with a debt previously contracted, shallinure to and be recoverable by the company, irrespective of any intention onthe part of the beneficial owner, director, or officer in entering into atransaction of holding the security purchased or of not repurchasing thesecurity sold for a period exceeding six (6) months. An action to recoverprofit may be instituted in any court of competent jurisdiction by the company,or by the owner of any security of the company in the name and on behalf of thecompany if the company fails or refuses to bring the action within sixty (60)days after request or fails diligently to prosecute the action, but no actionshall be brought more than two (2) years after the date the profit wasrealized. This section shall not be construed to cover any transaction wherethe beneficial owner was not the beneficial owner, both at the time of thepurchase and sale, or the sale and purchase, of the security involved, or anytransaction or transactions that the commissioner by rules and regulations mayexempt as not comprehended within the purpose of this section.