Securities Law Commons^™

Internalizing Outsider Trading, Ian Ayres, Stephen Choi

Michigan Law Review

Investing in the United States has become a hobby for many. Individual ownership of equity, moreover, has increased over the past decade due in part to the introduction of internet-based trading. While providing the possibility for greater returns compared with bank savings accounts, among other investment alternatives, the public capital markets also pose greater risks for investors. Many individual investors lack both the resources and the incentive to analyze the value of any particular security in the market. Such investors thus trade at a systematic disadvantage relative to more informed parties. In response, regulators have asserted that certain informational disparities …

Book Review, Mark J. Loewenstein

Publications

No abstract provided.

Weapons To Fight Insider Trading In The 21st Century: A Call For The Repeal Of Section 16(B), Michael H. Dessent

Faculty Scholarship

No abstract provided.

Moving Toward A Clearer Definition Of Insider Trading: Why Adoption Of The Possession Standard Protects Investors, Lacey S. Calhoun

University of Michigan Journal of Law Reform

In recent years, insider trading has become a publicized focus of securities law enforcement. The definition of insider trading has emerged slowly through case law, and the term has been clarified by new theories of liability. The use and possession tests are two standards of liability used to judge the treatment of inside information. The use standard offers a defense to insider trading liability while the possession standard premises liability on mere possession of inside information. This Note argues that courts should adopt the possession standard because this standard better protects investors, a primary goal of the Securities Exchange Act …

The Morality Of Insider Trading In The United States And Abroad, Ramzi Nasser

Oklahoma Law Review

No abstract provided.

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 …

The Morality Of Insider Trading In The United States And Abroad, Ramzi Nasser

Oklahoma Law Review

No abstract provided.

"Disclose-Or-Abstain" Without Restraint: The Supreme Court Misses The Mark On Rule 14e-3 In United States V. O'Hagan, E. Livingston B. Haskell

Washington and Lee Law Review

No abstract provided.

Look Who's Talking: Defining The Scope Of The Misappropriation Theory After United States V. O'Hagan, Janet E. Kerr, Tor S. Sweeney

Oklahoma Law Review

No abstract provided.

United States V. O'Hagan: Agency Law And Justice Powell's Legacy For The Law Of Insider Trading, Adam C. Pritchard

Articles

The law of insider trading is judicially created; no statutory provision explicitly prohibits trading on the basis of material, non-public information. The Supreme Court's insider trading jurisprudence was forged, in large part, by Justice Lewis F. Powell, Jr. His opinions for the Court in United States v. Chiarella and SEC v. Dirks were, until recently, the Supreme Court's only pronouncements on the law of insider trading. Those decisions established the elements of the classical theory of insider trading under § 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"). Under this theory, corporate insiders and their tippees who …

United States V. O'Hagan: Defining The Limits Of Fraud And Deceptive Pretext Under Rule 10b-5, Theodore C. Mccullough

Seattle University Law Review

This Note argues that broadening the present embezzlement model of the Rule 10b- 5 misappropriation theory will more fully reflect both the language and intent of § 10(b) (of the 1934 Securities Exchange Act) and Rule 10b-5, and more importantly accommodate the sophistication of today's insider trading schemes. Part II of this Note examines the uses of inside information both prior to and after the creation of the 1934 Securities Exchange Act, and how § 10(b) and Rule 10b-5 were created to proscribe these uses. Part III examines the language and intent behind § 10(b) and Rule 10b-5 and argues …

The Insider Story, Richard C. Reuben

Faculty Publications

The central issue in United States v. O'Hagan, No. 96-842, is the validity of the so-called "misappropriation theory" of insider trader liability under Section 10(b) of the Securities and Exchange Act of 1934. 15 US.C. 78(j)(b). The justices heard oral arguments in April. If the theory propounded by federal regulators is endorsed by the Court, it would expand insider trader liability under U.S. law.

The Fourth Circuit Breaks Ranks In United States V. Bryan: Finally, A Repudiation Of The Misappropriation Theory, Sean P. Leuba

Washington and Lee Law Review

No abstract provided.

Suspension And Disbelief (Or, How Managed Should A Market Be?), Caroline Bradley

Articles

No abstract provided.

Incorporating State Law Fiduciary Duties Into The Federal Insider Trading Prohibition, Stephen M. Bainbridge

Washington and Lee Law Review

No abstract provided.

The Misappropriation Theory Of Insider Trading: Its Past, Present, And Future, Troy Cichos

Seattle University Law Review

In this Comment, I discuss the evolution and current application of the misappropriation theory of insider trading and argue that it simply strays too far from the fraud tenets of Section 10(b) and Rule 10b-5. A thorough understanding of the misappropriation theory is possible only if one understands how it diverges from the classic theory of insider trading. Therefore, in Section II, I discuss the evolution and present doctrine of classic insider trading. The discussion in this Section focuses on major cases in the development of this theory. Section III presents the misappropriation theory of insider trading. Section III focuses …

Insider Trading Deterrence Versus Managerial Incentives: A Unified Theory Of Section 16(B), Merritt B. Fox

Michigan Law Review

Part I of this article assesses the social costs of a crude rule of thumb. Because section 16(b) applies to a given class of paired transactions, it deters both transactions based on inside information and transactions not so based. Each time section 16(b) is stretched to include a class of paired transactions, it deters some additional innocent transactions. This side effect will take the form of officers' and directors' purchasing fewer shares in their own companies and refusing to accept as large a portion of their compensation in a form based on share price. There are strong theoretical and empirical …

Insider Trading Deterrence Versus Managerial Incentives: A Unified Theory Of Section 16(B), Merritt B. Fox

Faculty Scholarship

Part I of this article assesses the social costs of a crude rule of thumb. Because section 16(b) applies to a given class of paired transactions, it deters both transactions based on inside information and transactions not so based. Each time section 16(b) is stretched to include a class of paired transactions, it deters some additional innocent transactions. This side effect will take the form of officers' and directors' purchasing fewer shares in their own companies and refusing to accept as large a portion of their compensation in a form based on share price. There are strong theoretical and empirical …

Enterprise Liability And Insider Trading, Alfred F. Conard

Washington and Lee Law Review

No abstract provided.

Reinventing A Security: Arguments For A Public Interest Definition, Eric A. Chiappinelli

Washington and Lee Law Review

No abstract provided.

From "Shoeless" Joe Jackson To Ivan Boesky: A Sporting Response To Law And Economics Criticism Of The Regulation Of Insider Trading, Donald Arthur Winslow, Seth C. Anderson

Kentucky Law Journal

No abstract provided.

Insider Trading In A Globalizing Market: Who Should Regulate What?, Merritt B. Fox

Faculty Scholarship

Trading by an insider on the basis of material non-public corporate information violates the securities laws of the United States and of many, but not all, other countries. As the market for securities becomes increasingly global, the question of whose rules should apply to any particular transaction will arise with increasing frequency. This article addresses that question.

Each country's regime concerning insider trading – which transactions, if any, to ban, and how to do so – has largely evolved through consideration of transactions that are entirely domestic in character and impact. In these transactions, the issuer's state of incorporation and …

The Regulation Of Insider Trading In The European Community, Manning Gilbert Warren Iii

Washington and Lee Law Review

No abstract provided.

Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr.

Faculty Scholarship

Within academia, paradigm shifts occur regularly, some more important than others. As the takeover wave of the 1980s ebbs, a significant shift now appears to be in progress in the way the public corporation is understood. Above all, the new thinking emphasizes that political forces shaped the modern corporation. While the old paradigm saw the structure of the corporation as the product of a Darwinian competition in which the most efficient design emerged victorious, this new perspective sees political forces as constraining that evolutionary process and possibly foreclosing the adoption of a superior organizational form. Thus, my colleague Professor Mark …

The Insider Trading And Securities Fraud Enforcement Act: Has Congress Supplied A Limitations Period Appropriate For Use In Private 10b-5 Actions?, David J. Guin, David R. Donaldson

Washington and Lee Law Review

No abstract provided.

Are Takeover Premiums Really Premiums? Market Price, Fair Value, And Corporate Law, Lynn A. Stout

Cornell Law Faculty Publications

No abstract provided.

Icarus And His Waxen Wings: Congress Attempts To Address The Challenges Of Insider Trading In A Globalized Securities Market, John T. Thomas

Vanderbilt Journal of Transnational Law

This Note addresses the globalization of the world financial securities markets and the potential for fraud in these expanded markets. The author considers actual cases of insider trading that have crossed national borders and the enforcement problems such cases raise. The author analyzes the first significant response by the United States Congress to these problems and concludes that the response is inadequate. Congress recognizes the incredible pace of evolution of the world financial markets, but is slow to address this process. The SEC offered serious proposals to Congress--proposals that apparently have bipartisan support--and Congress failed to act on these proposals …

7th Annual Seminar On Securities Law, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, H. Alexander Campbell, Rutheford B. Campbell Jr., Ivan M. Diamond, Fredrich H. Thomforde, Frederic H. Davis, Cynthia W. Young, C. Craig Bradley Jr, David W. Harper, Gary L. Stage, Garrison R. Cox

Continuing Legal Education Materials

Materials from the UK/CLE 7th Annual Seminar on Securities Law held February 12-13, 1988.

The Regulation Of Insider Trading In The United States, United Kingdom, And Japan, Barbara Ann Banoff

Michigan Journal of International Law

Part I of this article will briefly discuss the American laws regulating insider trading; Part II will discuss the law of the United Kingdom; and Part III will discuss the regulation-or, more accurately, the non-regulation-of insider trading in Japan.

Survey Of National Legislation Regulating Insider Trading, Mary J. Houle

Michigan Journal of International Law

In recent years much attention has been focused on the phenomenon of "insider trading." The United States Securities and Exchange Commission (SEC) now appears to have wide-spread public support for its hard-line approach toward insider trading practices. Previously hostile to a broad prohibition of insider trading, even the Supreme Court has lent a sympathetic ear to the pleas of the SEC in the recent Carpenter case, which hinted at support for the misappropriation theory of insider trading. The prevailing attitude is that confidence in the fair operation of the securities markets must not be undermined by insiders who deprive those …