The Court first granted summary judgment as to all the issues except the amount of the profits made by D, which it referred to a master, on whose report it entered final judgment. Gratz (P), a shareholder in the Missouri-Kansas-Texas Railroad Company sued on behalf of the Company under Section 16(b). Section 16(b) makes officers, directors, and anyone who is an owner of 10% or more of certain corporations strictly liable for any profits on the purchase or sale or sale or purchase of stock occurring within 6 months of each other. P sued Claughton (D) and claimed he owned more than 10% of the Company and that D must turn over alleged profits made on the purchase and sale of corporate stock over a six-month period. The case was referred to a special master to compute the amount of the profits made. The master did not match the purchases and sales but instead maximized profits during the relevant trading period by matching the lowest and highest trades during the relevant time frame. This resulted in an alleged illegal profit in excess of $300,000. The court entered judgment and D appealed. D claimed he suffered a net loss of $400,000 and had not made a profit.

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