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Insiders, Options And The Fiduciary Principle: A Rule 10b-5 Loophole, Eric B. Lesser
Insiders, Options And The Fiduciary Principle: A Rule 10b-5 Loophole, Eric B. Lesser
Fordham Urban Law Journal
This Note analyzes transactions involving the purchase and sale of option contracts by an insider possessing material nonpublic information to determine whether the insider violates section 10(b) or Rule 10(b)(5). This Note presents an overview of the framework of Rule 10(b)(5) and, in particular, its enforcement in insider trading cases, and then examines the differing views espoused by courts regarding the duty of disclosure. A general discussion of options and the options market is then provided. Finally, this Note illustrates the loophole by presenting a typical options scenario and then suggests applications of insider trading law the effectively closes the …
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.
An Outsider Looks At Insider Trading: Chiarella, Dirks And The Duty To Disclose Material Nonpublic Information , Frank P. Luberti, Jr.
An Outsider Looks At Insider Trading: Chiarella, Dirks And The Duty To Disclose Material Nonpublic Information , Frank P. Luberti, Jr.
Fordham Urban Law Journal
The "abstain or disclose" rule, which states that persons in possession of material non-public information must either disclose that information or refrain from trading on such information, is at the heart of insider trading law. Despite the complex legal system designed to thwart insider trading, the community's widespread criticism of such conduct, and the risk of civil and/or criminal sanctions for violation of federal securities law, insider trading cases have been on the rise. This Note argues that a more serious stance against insider trading must be taken in order to achieve the federal securities laws' purposes and so that …