The rule mandates that if an officer, director, or any shareholder holding more than 10% of outstanding shares of a publicly traded company makes a profit on a transaction with respect to the company's stock during a given six-month period, that officer, director, or shareholder must pay the difference back to the company. Note that the profit calculated is the maximum considering each pair of sales and purchases, a larger trade could be paired with trades up to six month prior as well as up to six months later and the correct calculation is a linear programming problem
The rule mandates that if a company's executive, director, or shareholder holding more than 10% of outstanding shares makes a profit on a transaction with respect to the company's stock during a given six-month period, they must repay the difference to the company. Note that the profit calculated is the maximum considering each pair of sales and purchases, a larger trade could be paired with trades up to six months prior as well as up to six months later and the correct calculation is a linear programming problem