Trader-Turned-Informant Can’t Escape Short-Swing Lawsuit (1)

A broker-turned-FBI-informant can’t evade legal challenges involving profits allegedly derived from manipulative trading, a US judge said.

Guy Gentile had his second motion to dismiss two separate suits denied on Tuesday, when Judge Denise L. Cote said that the plaintiffs have proper standing to bring their claims because of the concrete harm inflicted by so-called short-swing trading, in which a stock is bought and sold within a six-month period.

The broker and his Bahamas-based company had acquired more than 10% stakes in both Avalon Holdings Corp. and New Concept Energy Inc. before engaging in manipulative trading, the companies said in ...