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Securities Law

Securities law

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Insider Trading And Cryptoassets: The Waters Just Got Muddier, John P. Anderson Jan 2020

Insider Trading And Cryptoassets: The Waters Just Got Muddier, John P. Anderson

Journal Articles

The absence of any clear guidance on when a digital asset is a security is a problem that has ramifications far beyond this article’s limited focus on our insider trading enforcement regime. Nevertheless, I have argued that the impending application of our insider trading laws to cryptoassets helps to illustrate why it is unfair and unjust to force market participants to wait much longer for a definitive answer to the question of when a digital asset is a security.


A Tale Of Two Cities: Mark Cuban, David Einhorn, And The Ethics Of Insider Trading Reform, John P. Anderson Jan 2020

A Tale Of Two Cities: Mark Cuban, David Einhorn, And The Ethics Of Insider Trading Reform, John P. Anderson

Journal Articles

The similarities between the insider trading stories of Mark Cuban and David Einhorn suggest that their circumstances are not uncommon, and the contrasting results also help to illustrate some significant differences between the common law fraud-based insider trading regime in the U.S. and the statutory parity-of-information regime in Europe. And, as Congress and the SEC continue to weigh the merits of reform in the U.S., the examples of Cuban and Einhorn are particularly instructive for the reasons to be developed in the remaining sections of this Article. First, as will be explained in Part II of this Article, contrasting the …


Undoing A Deal With The Devil: Some Challenges For Congress's Proposed Reform Of Insider Trading Plans, John P. Anderson Jan 2019

Undoing A Deal With The Devil: Some Challenges For Congress's Proposed Reform Of Insider Trading Plans, John P. Anderson

Journal Articles

The adoption of Rule 10b5-1 was, in a manner of speaking, a deal with the devil that the SEC and some lawmakers now appear to regret having made. The problem is that, as is often the case with such a deal, it cannot be easily undone. I identify challenges presented by the restrictions on Trading Plan use that Congress has proposed in the Corporate Insiders Act. In light of these challenges, I argue that effective Trading Plan reform cannot be accomplished by simply restricting the use of Trading Plans while leaving Rule 10b5-1(b)'s awareness test in place. If there is …


When Does Corporate Criminal Liability For Insider Trading Make Sense?, John P. Anderson Jan 2016

When Does Corporate Criminal Liability For Insider Trading Make Sense?, John P. Anderson

Journal Articles

It is clear that not all insider trading is victimless, and not all employers of insider traders are innocent. But I am convinced that these critics are correct to point out that the current enforcement regime is absurdly overbroad in that it affords no principled guarantee to corporate victims of insider trading that they will not be indicted for the crimes perpetrated against them. The law should be reformed to ensure that corporations are only held criminally liable where they are guilty of some wrongdoing.


Anticipating A Sea Change For Insider Trading Law: From Trading Plan Crisis To Rational Reform, John P. Anderson Jan 2015

Anticipating A Sea Change For Insider Trading Law: From Trading Plan Crisis To Rational Reform, John P. Anderson

Journal Articles

The Securities and Exchange Commission is poised to take action in the face of compelling evidence that corporate insiders are availing themselves of rule-sanctioned Trading Plans to beat the market. These Trading Plans allow insiders to trade while aware of material nonpublic information. Since the market advantage insiders have enjoyed from Plan trading can be traced to loopholes in the current regulatory scheme, increased enforcement of the existing rules cannot address the issue. But, simply tweaking the existing rule structure to close these loopholes would not work either. This is because the SEC adopted the current rule as a part …


What’S The Harm In Issuer-Licensed Insider Trading?, John P. Anderson Jan 2015

What’S The Harm In Issuer-Licensed Insider Trading?, John P. Anderson

Journal Articles

There is growing support for the claim that issuer-licensed insider trading (when the insider’s firm approves the trade in advance and has disclosed that it permits such trading pursuant to published guidelines) is economically efficient and morally harmless. But for the last thirty-five years, many scholars and the U.S. Supreme Court have relied on Professor William Wang’s “Law of Conservation of Securities” to rebut claims that insider trading can be victimless. This law is purported to show that every act of insider trading, even those licensed by the issuer, causes an identifiable harm to someone. This article argues that the …


Greed, Envy, And The Criminalization Of Insider Trading, John P. Anderson Jan 2014

Greed, Envy, And The Criminalization Of Insider Trading, John P. Anderson

Journal Articles

In October 2011, a U.S. district court sentenced Raj Rajaratnam to eleven years in federal prison for insider trading. This is the longest sentence for insider trading in U.S. history, but it is significantly less than the nineteen to twenty-four-year term requested by the government. Such harsh prison terms (equal in some cases to those meted out for murder or rape) require sound justification in a liberal society. Yet jurists, politicians, and scholars have failed to offer a clear articulation of either the economic harm or the moral wrong committed by the insider trader. This Article looks to fill this …