The U.S. Supreme Court case Keith R. Gollust, et al. v. Ira L. Mendell, Etc., et al., 1990 revolved around the interpretation of a provision in the Securities Exchange Act that allows shareholders to file suit on behalf of a corporation if they were shareholders at the time of the alleged wrongdoing and continue to be so throughout litigation process (the "contemporaneous ownership requirement"). The plaintiffs had acquired their shares after learning about potential misconduct by company directors but before filing suit; during litigation, they lost their shareholder status due to a merger. The defendants argued this disqualified them from pursuing legal action under the contemporaneous ownership requirement; however, lower courts disagreed and allowed proceedings to continue despite loss of shareholder status post-filing but pre-judgment. Upon reaching Supreme Court level, it was ruled that once an individual has met initial requirements for standing as per Section 16(b) - i.e., being a shareholder when both discovering misconduct and initiating lawsuit - subsequent changes in shareholding status do not affect eligibility for continuing with said lawsuit.

In the dissenting opinion for Gollust v. Mendell, Justice Scalia argued that the majority's interpretation of Section 16(b) of the Securities Exchange Act was incorrect. He disagreed with their view that a plaintiff retains standing to sue under this provision even after selling all his shares in a company. According to Scalia, such an interpretation contradicts both traditional common law principles and Congress' intent when it enacted Section 16(b). The justice contended that at common law, only current shareholders could bring derivative suits on behalf of corporations; former shareholders who had sold all their stock lacked standing because they no longer possessed any financial stake in the corporation's success or failure. Furthermore, he believed Congress intended Section 16(b) to deter insider trading by allowing companies (and through them, their current shareholders) to recover short-swing profits from insiders - not by enabling former shareholders who have divested themselves entirely of interest in a company’s fortunes to pursue personal lawsuits against those insiders.