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Beyond Dirks: Gratuitous Tipping And Insider Trading, Donna M. Nagy
Beyond Dirks: Gratuitous Tipping And Insider Trading, Donna M. Nagy
Articles by Maurer Faculty
Did an investment banker who gratuitously shared material nonpublic information with his brother, with no expectation of receiving anything in return, commit securities fraud? And is the investment banker's brother-in-law jointly liable for trading securities on the basis of what he knew to be gratuitous tips? The Supreme Court is poised to answer those questions in Salman v. United States, after steering clear of insider trading law for nearly two decades. It has been even longer still since the Court last addressed securities fraud liability relating to stock trading tips-it articulated a "personal benefit" test for joint tipper-tippee liability in …
Insider Trading, Congressional Officials, And Duties Of Entrustment, Donna M. Nagy
Insider Trading, Congressional Officials, And Duties Of Entrustment, Donna M. Nagy
Articles by Maurer Faculty
This article refutes what has become the conventional wisdom that insider trading by members of Congress and legislative staffers is “totally legal” because such congressional officials are immune from federal insider trading law. It argues that this well-worn claim is rooted in twin misconceptions based on: (1) a lack of regard for the broad and sweeping duties of entrustment which attach to public office and (2) an unduly restrictive view of Supreme Court precedents, which have interpreted Rule 10b-5 of the Securities Exchange Act to impose liability whenever a person trades securities on the basis of material nonpublic information in …
The "Possession Vs. Use" Debate In The Context Of Securities Trading By Traditional Insiders: Why Silence Can Never Be Golden, Donna M. Nagy
The "Possession Vs. Use" Debate In The Context Of Securities Trading By Traditional Insiders: Why Silence Can Never Be Golden, Donna M. Nagy
Articles by Maurer Faculty
Traditional insiders occupy a very special position in the scheme of federal securities regulation. However, in a misguided quest for a single answer to the possession vs. use debate, courts, commentators, and even the SEC have tended to marginalize the significant differences between traditional insiders and other securities traders who may possess material nonpublic information. In the aftermath of the circuit court decisions in United States v. Smith and Securities and Exchange Commission v. Adler, courts and the SEC should follow a categorical approach in addressing the possession vs. use question, and should recognize that silence can never be golden …