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The Misappropriation Theory: Rule 10b-5 Insider Liability For Nonfiduciary Breach, Elliot Brecher
The Misappropriation Theory: Rule 10b-5 Insider Liability For Nonfiduciary Breach, Elliot Brecher
Fordham Urban Law Journal
This note traces the history of rule 10b-5 and its expansion and restriction in judicial decisions. The note goes on to discuss United States v. Carpenter, a Second Circuit case that drastically expands insider trading liability. The author agues that the misappropriation theory is outside of the statutory purpose of 10b-5 and that extending the provisions to reach insider trading goes beyond the premises of statutory construction articulated by the Court.
Closing A Loophole: Insider Trading In Standardized Options, Steve Thel
Closing A Loophole: Insider Trading In Standardized Options, Steve Thel
Fordham Urban Law Journal
This article is a Commentary on a previous Note published in the Fordham Urban Law Journal (Note, Insiders, Options and the Fiduciary Principle: A Rule 10b-5 Loophole, 16 Fordham Urb. L.J. 295 (1988)). The Note argued that the Supreme Court has expressly endorsed only one theory of insider trading liability, in Chiarella v. United States. By the simple expedient of trading options on common stock rather than the common stock itself, an insider can escape Rule 10b-5 liability under Chiarella.