Lauder Funds Defeat Estée Lauder Investor’s Insider Trading Suit

Two Lauder family funds that are controlling shareholders of Estée Lauder Cos. aren’t subject to suit for insider short-swing trading based partly on the company’s own share repurchases, a federal court ruled.

Under Section 16(b) of the Securities Exchange Act, “an issuer’s open-market share repurchases cannot be considered purchases by its insiders,” Judge John P. Cronan said Tuesday for the US District Court for the Southern District of New York. Securities and Exchange Commission regulations support that conclusion, he said.

The court joined a Middle District of Florida decision in another derivative suit brought by the same investor, Andrew Roth, ...