Harry Kay v. Scientex Corporation

719 F.2d 1009 Fed. Sec. L. Rep. P 99,546 Harry KAY, An Individual, Appellant/Cross-Appellee/Defendant, v. SCIENTEX CORPORATION, a Nevada corporation, Appellee/Cross-Appellant/Plaintiff. Nos. 82-6035, 82-6047. United States Court of Appeals, Ninth Circuit. Argued and Submitted June 7, 1983. Decided Nov. 1, 1983. Dale L. Gronemeier, Abouaf, Epstein, Myers & Gronemeier, North Sherman Oaks, Cal., for appellee/cross-appellant/plaintiff. Charles T. Rose, Los Angeles, Cal., for appellant/cross-appellee/defendant. OPINION Appeal from the United States District Court for the Central District of California. Before SKOPIL and FARRIS, Circuit Judges, and CROCKER, * District Judge. SKOPIL, Circuit Judge: INTRODUCTION 1 Harry Kay ("Kay") acquired majority ownership of ScienTex Corporation ("ScienTex") through stock acquisitions in 1975 and thereafter became a corporate officer and director. He was an insider for purposes of section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. Sec. 78p. 1 2 Kay acquired and sold additional stock during a six month period in 1979 and 1980. ScienTex sought Kay's short-swing profits in an action under section 16(b) of the Securities Exchange Act.…