(USA) A provision under the Securities Exchange Act of 1934 regulating trading by corporate insiders. It provides that any profit realised by an insider from any purchase and sale or sale and purchase of stock of such company within any period of less than six months shall be deemed to belong to and to be recoverable by the company. Section 16 provides for strict liability, and the intentions of the insider will not be considered in any action by the company to recover profits. Section 16 also requires insiders to report all trades in a company’s securities. See ‘Short Swing Profits’ and ‘Reporting Company Forms/Forms 3, 4, and 5’.