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Full-Text Articles in Securities Law
The Sec's Neglected Weapon: A Proposed Amendment To Section 17(A)(3) And The Application Of Negligent Insider Trading, Marc I. Steinberg, Abel Ramirez Jr.
The Sec's Neglected Weapon: A Proposed Amendment To Section 17(A)(3) And The Application Of Negligent Insider Trading, Marc I. Steinberg, Abel Ramirez Jr.
Faculty Journal Articles and Book Chapters
Section 17(a)(3) has been widely neglected as a weapon in the Securities and Exchange Commission’s (SEC) arsenal against insider trading. Section 17(a)(3) carries the potential of providing the SEC with an advantage that is not afforded by Section 10(b), Rule 10b-5, or Rule 14e-3 — the authority to prosecute insider trading claims premised on the lesser mental state of negligence, thus casting a wider net to enforce insider trading regulations against a new category of defendants — negligent inside traders as well as negligent tippers and tippees. Currently, when pursuing insider trading violations, the Securities and Exchange Commission (SEC) primarily …