A Section 16(b) demand letter arrives with a number attached: a plaintiff firm's own lowest-in/highest-out match over an insider's Form 4 filings, and a claimed profit the corporation is asked to recover. The recipient side, whether the insider or the issuer's general counsel, has had no deterministic free way to independently check that number before it becomes a negotiating position. This pack composes two nodes so counsel can recompute the matchable-pair figure from the same declared transaction facts, compare it against what the letter claims, and hold a receipt of the comparison rather than a spreadsheet nobody can replay.
Stage 1 does the arithmetic the demand letter itself relies on: the Smolowe/Gratz lowest-in/highest-out maximal-recovery construction, applied to a declared transaction list rather than to the letter's own assertions. Stage 2 turns the resulting receipt into something you can put in the file: a bundle labeled with exactly the verification tier its declared gate results support.
The recompute. You declare each transaction's type, date, price, and share count, any exemption flags such as a Rule 16b-3 approved-plan exemption, the insider's officer/director, ten-percent-owner, and foreign-private-issuer status, and the demand letter's claimed profit figure where you have one. The node pairs the lowest-priced eligible purchase against the highest-priced eligible sale, repeatedly, within a 183-day approximation of the statutory less-than-six-months window, skipping any pairing that would produce a loss rather than netting it against a profitable one. A declared exemption removes a transaction from matching without the node independently deciding whether that exemption applies. It also runs an informational Section 16(a)/(b) applicability check, including the HFIAA asymmetry for a foreign private issuer's officers and directors.
The evidence bundle. The Stage 1 receipt's execution hash goes in, together with your declaration of which verification gates the receipt has passed, and out comes a shareable bundle stamped OCG-Verify, OCG-Execute, or OCG-Prove, whichever tier those declared results support. The label re-expresses gate outcomes you declare; it re-runs nothing and mints no new trust claim. Its value is honesty in transit: the general counsel, the board, or opposing counsel who receives the bundle sees exactly what has been verified about the receipt, and exactly what has not.
Stage 1 emits this vocabulary itself; it is not a reading rule this page adds. The discipline is in the third word. A recompute with nothing to compare it against is not a quiet pass, and it is not treated as one.
| The receipt proves | The receipt does NOT prove |
|---|---|
| That the declared transaction list, matched under the lowest-in/highest-out construction within the 183-day approximation, produces the recorded matched pairs and total. | That the declared transactions happened, on those dates, at those prices. A list assembled to favor either side recomputes exactly as cleanly as a true one. |
| That a declared exemption was excluded from matching, and that the comparison against the demand letter's claimed figure was computed independently of that figure. | That any declared exemption in fact applies, that the insider's officer/director or ten-percent-owner status is correct, or that the six-month boundary's day-count approximation matches true calendar-month arithmetic for a pair near the edge. |
| That the evidence bundle's tier label matches the gate results declared for the receipt, per the cumulative SIDECAR.1 tiers. | That any gate actually passed. The label re-expresses your declaration; a wrong declaration produces a confidently wrong label. |
That a third party can replay the same arithmetic from the same declared inputs and reach the same execution_hash. | That the underlying Section 16(b) claim is meritorious, that any exemption or matchability dispute is resolved, or that a Rule 144 volume-limitation question has been addressed. |
Carried from the node itself rather than restated here as a fact of our own. Confirm current statutory and case text with counsel before relying on any of it.
As read on 2026-08-07 and carried in art-573: the lowest-in/highest-out construction traces to Smolowe v. Delvag Reinsurance Co., 136 F.2d 231 (2d Cir. 1943), and Gratz v. Claughton, 187 F.2d 46 (2d Cir. 1951), maximizing recovery to the corporation rather than measuring the insider's actual realized gain. It is the widely cited construction, not one this pack re-derived from primary case text at build time, and is named as a research finding needing independent re-verification.
A Rule 144 volume-limitation check on any sale is deliberately not in this pack and not in any node it composes; it is a named follow-on tool. The Helm-side watch note described above, an automated re-run against a standing Form 4 feed, is likewise a named follow-on, not a live-data capability this pack claims to have.