Securities Law Commons^™

The Future Of Insider Trading After Salman: Perpetuation Of A Flawed Analysis Or A Return To Basics, Charles W. Murdock

Faculty Publications & Other Works

In large part due to two poorly reasoned decisions by Justice Powell in the early 1980s, Chiarella v. U. S. and Dirks v. SEC, the development of insider trading law has been constrained, enforcement has been hampered, and insider-trading has grown to the point where hundreds of millions of dollars are at stake. Moreover, Chiarella and Dirks were inconsistent with the Congressional policy that the purpose of the securities laws is to ensure a level playing field where one participant does not have an undue advantage over another participant. A Second Circuit decision, U.S. v. Newman unnecessarily extended Dirks, notwithstanding …

From Texas Gulf Sulphur To Laudato Si': Mining Equitable Principles From Insider Trading Law, Michael Kaufman

Faculty Publications & Other Works

In SEC v. Texas Gulf Sulphur, the Second Circuit declared that all investors trading on impersonal exchanges should have equal access to material information, and therefore anyone who possesses material inside information must either turn it over to the investing public or not trade. The broad reach of that insider trading prohibition sent shock waves throughout the financial markets and encountered significant judicial resistance from the Supreme Court.

Although the Supreme Court initially rejected the insider trading prohibition announced in Texas Gulf Sulphur, the fundamental equitable trading principles underlying that decision have endured. This article shows that TGS …