Explains the United States Supreme Court case, Foremost-McKesson, Inc. v. Provident Securities Co. In that case, the Court held that in order to be subject to liability under Section 16(b) of the Securities Exchange Act of 1934, the stockholder must be a “beneficial owner who might be able to initiate both the purchase and sale on the basis of advance information” prior to initiating a short-swing transaction. The author hopes that the Court will clarify section 16(b) further by eliminating the confusion surrounding that section’s exception clause.