MARVIN MANDEL, Governor

1883

§6-501 of this subtitle.
[[6-514. TRADING BY CONTROLLING PERSON.

(A)   PURPOSE OF SECTION.

THIS SECTION IS INTENDED  TO PREVENT THE UNFAIR USE

OF INFORMATION THAT MAY      HAVE BEEN OBTAINED BY A

CONTROLLING PERSON BECAUSE OF      HIS RELATIONSHIP TO THE
INSURER.

(B)   PROFITS TO INURE TO INSURER.

(1)   UNLESS THE EQUITY SECURITY IS ACQUIRED IN
GOOD FAITH IN CONNECTION WITH A DEBT PREVIOUSLY
CONTRACTED, ANY PROFIT REALIZED BY A CONTROLLING PERSON
FROM THE PURCHASE AND SALE OR FROM THE SALE AND PURCHASE
OF ANY EQUITY SECURITY OF THE INSURER WITHIN A PERIOD OF
LESS THAN SIX MONTHS SHALL INURE TO AND BE RECOVERABLE BY
THE INSURER.

(2)    THE PROVISIONS OF THIS SUBSECTION APPLY
NOTWITHSTANDING ANY INTENTION ON THE PART OF THE
CONTROLLING PERSON WHEN HE ENTERS INTO THE TRANSACTION TO
HOLD AN EQUITY SECURITY PURCHASED OR NOT REPURCHASE AN
EQUITY SECURITY SOLD FOR A PERIOD EXCEEDING SIX MONTHS.

(C)   SUIT TO RECOVER PROFIT.

(1)   THE INSURER MAY INSTITUTE A SUIT AT LAW
OR IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION TO
RECOVER ANY PROFIT WHICH INURES TO ITS BENEFIT UNDER
SUBSECTION (B) OF THIS SECTION.

(2)    THE OWNER OF ANY SECURITY OF THE INSURER
MAY INSTITUTE THE SUIT IN THE NAME AND ON BEHALF OF THE
INSURER IF THE INSURER FAILS OR REFUSES TO BRING SUIT
WITHIN 60 DAYS AFTER REQUESTED OR FAILS TO PROSECUTE THE
SUIT DILIGENTLY.

(3)   THE SUIT MAY NOT BE BROUGHT MORE THAN TWO
YEARS AFTER THE PROFIT IS REALIZED.

(D)   APPLICATION OF SECTION.

THIS SECTION DOES NOT APPLY:

(1) TO ANY TRANSACTION IF THE CONTROLLING
PERSON WAS NOT, BOTH AT THE TIME OF THE PURCHASE AND SALE
OR THE SALE AND PURCHASE OF THE EQUITY SECURITY INVOLVED,
DIRECTLY OR INDIRECTLY A BENEFICIAL OWNER OF MORE THAN 10
PERCENT OF ANY CLASS OF AN EQUITY SECURITY OF THE
INSURER; OR