1-800-Flowers Investor Scores Revival of Short Swing Trade Suit

A 1-800-Flowers.com Inc. stockholder can proceed with a lawsuit on behalf of the company accusing other Flowers.com stockholders of short-swing trading, the Second Circuit ruled Monday in a reversal.

Judge Jose A. Cabranes, of the US Court of Appeals for the Second Circuit, said company insiders’ alleged violation of a statutory short-swing trade ban confers Brad Packer’s standing to sue, reviving the case after a district court said Packer lacked standing under recent US Supreme Court precedent.

Section 16(b) of the Securities Exchange Act of 1934 imposes a fiduciary duty on 10% shareholders in a company, conferring on other ...