A federal court of appeals held out the possibility that insider trading prohibitions – at least under the classic theory – do not apply to mutual fund redemptions.
The U.S. Court of Appeals for the Seventh Circuit recently reversed and remanded a summary judgment granted to the Securities and Exchange Commission (SEC) in a case alleging that a mutual fund’s chief compliance officer (CCO) improperly redeemed fund shares while in possession of material non-public information. The court directed the district court to address the novel issue of whether Section 10(b) of the Securities Exchange Act of 1934 applies to insider trading in mutual fund shares.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Topics: Chief Compliance Officers, Insider Trading, Mutual Funds, Right of Redemption, SEC, Securities Exchange Act, Summary Judgment
Published In: Business Torts Updates, Civil Procedure Updates, General Business Updates, Finance & Banking Updates, Securities Updates