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U.S. Court of Appeals, Second Circuit. (Photo: Bumble Dee/Shutterstock) U.S. Court of Appeals for the Second Circuit. (Photo: Bumble Dee/Shutterstock)

The U.S. Court of Appeals for the Second Circuit on Monday reversed a lower court order requiring a hedge fund to return nearly $5 million it obtained through alleged “short-swing” trades of 1-800-Flowers.com stock.

A panel of the federal appeals court ruled that a Brooklyn federal magistrate judge applied too broad an interpretation of a provision of federal securities law, which requires company insiders to disgorge profits from the purchase and sale of company stock that occur within a six-month period.

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Tom McParland

Tom McParland of New York Law Journal can be contacted at [email protected] Follow him on Twitter @TMcParlandALM.

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