Securities Law Commons^™

Comment, Rationalizing Liability For Nondisclosure Under 10b-5: Equal Access To Information And United States V. Chiarella,, Juliet P. Kostritsky

Faculty Publications

Chiarella provided the Second Circuit with an opportunity to resolve an important issue on which there previously had been no square holding: whether a person who is not an insider and has no inside knowledge about the company whose securities he is trading nevertheless has a duty to disclose nonpublic material information in his possession about impending stock market events. The court viewed such a person as a "market insider"'" and found a duty to disclose. To evaluate the propriety of imposing liability in this situation, this comment will first trace the development and expansion of liability for nondisclosure under …