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Fund Gets New Shot at $4.9 Million Short-Swing Profit Award

Nov. 23, 2020, 9:42 PM

Raging Capital Master Fund Ltd. doesn’t have to disgorge $4.9 million in allegedly ill-gotten short-swing profits realized from trades in 1-800-Flowers.com stock—at least not yet—according to a Second Circuit ruling in a New York shareholder derivative suit released Monday.

Factual questions need to be developed in the Eastern District of New York as to Master Fund’s status as a “beneficial owner” for purposes of Section 16(b) of the Securities Exchange Act, Judge Jon O. Newman wrote for the U.S. Court of Appeals for the Second Circuit.

Section 16(b) of the exchange requires requires an officer, director, or “beneficial owner” of ...