Material Nonpublic Information

News & Analysis as of

Hedge Funds and Material Nonpublic Information: The Role of Deception, Duty, Breach, Personal Benefit and Knowledge in Creating...

The last thing hedge funds need is another wake up call about the risks of liability for trading on the basis of material nonpublic information. But if they did, a July 17 article in the Wall Street Journal would provide it....more

Second Circuit Holds that Federal Common Law Prohibits Trading By Insiders of a Cayman Islands Corporation While In Possession of...

In Steginsky v. Xcelera Inc., Nos. 13-1327-cv, 13-1892-cv, 2014 WL 274419 (2d Cir. Jan. 27, 2014), the United States Court of Appeals for the Second Circuit held that even when a company’s securities are unregistered, federal...more

Financial Services Quarterly Report - Fourth Quarter 2013: Political Intelligence Firms – Insider Trading and Enforcement Shifts...

Insider trading remains a top priority for the Securities and Exchange Commission (SEC) and Department of Justice (DoJ). In fiscal year 2012, the SEC filed 58 enforcement actions against 131 individuals and entities and the...more

Banks Encouraged to Share Information Related to Elder Abuse

One of the most common forms of elder abuse is financial exploitation. Older adults often have valuable assets and vulnerabilities, such as mental or physical disabilities, that make them prime targets by both strangers and...more

The Guide to Social Media and the Securities Laws

REGULATION FD - Beginning in 1999 and continuing into 2000, media reports about selective disclosure of material nonpublic information by issuers raised concerns that select market professionals who were privy to this...more

The Stock Act, Political Intelligence, and Traps for the Unwary

Last year, Congress wrote and President Obama signed into law the Stop Trading on Congressional Knowledge Act of 2012 (the STOCK Act). When the law was enacted, Members of Congress, their staffs, and Executive Branch...more

Best Laid Plans Gone Awry: Practices for Rule 10b5-1 Trading Plans

Rule 10b5-1 trading plans are in the limelight due to investigations initiated by U.S. Attorney’s Offices and the SEC into possible abuses by corporate executives of such plans. Now, more than ever, companies and their boards...more

Bankruptcy Implications of Affiliated Lender Provisions and Debt Buybacks - Unenforceability of Bankruptcy Voting Proxies Expose...

Over the last few years, provisions in credit agreements permitting the Borrower’s equity sponsor and other affiliates (typically referred to as “Affiliated Lenders”), to purchase term loans made thereunder and allowing the...more

SEC OKs Social Media for Company Announcements; Investors Must be Alerted

The Securities and Exchange Commission has issued a report concluding that social media, such as Facebook and Twitter, may constitute legitimate means for a reporting company to make public announcements in compliance with...more

Is It Ever Okay to Exchange Competitively Sensitive, Nonpublic Information with a Competitor?

Rarely, according to a recent Federal Trade Commission (“FTC”) enforcement action against two nationally known hair restoration businesses — Bosley and Hair Club. However, before you start chatting up your competitor for...more

SEC Greenlights Use of Social Media for Publicly Disclosing Company Information

Recognizing the reality that many investors likely get more information from Facebook and Twitter than a corporate 10-K and that most public companies have a robust social media presence, the U.S. Securities and Exchange...more

SEC Issues Guidance on the Use of Social Media to Disclose Company Information

On April 2, 2013, the SEC provided guidance on the use of social media to disclose company information in a Report of Investigation under Section 21(a). The investigation concerned Netflix's chief executive officer (CEO)...more

Is The Medium The Message? Netflix's Decision To Post Material Information On Social Media Channels

The news is out! There’s a buzz in the blogosphere. It’s trending on Twitter. The Securities and Exchange Commission has authorized the use of social media channels for the disclosure of material, non-public information. In a...more

Alberta Securities Commission Decision Highlights the Importance of Context in Assessing Materiality

A recent decision of the Alberta Securities Commission addresses allegations of insider trading (and in the case of one respondent, tipping) against several senior officers of a public company and a spouse of an executive. In...more

CME Block Trade Advisories Clarify Nonpublic Information Restrictions

In two recent market regulation advisory notices (RA1303-3 and RA1307-4), CME Group clarified its rules regarding the disclosure and use of nonpublic information based upon a solicitation to participate in a block trade. The...more

SEC Report Opens Door to Use of Social Media

On April 2, 2013, the U.S. Securities and Exchange Commission (the “SEC”) issued a Report of Investigation (the “Social Media Report”) clarifying that a company subject to Regulation Fair Disclosure (“Regulation FD”) may use...more

Client Insight: SCC Resolution on offshore entities' disclosure of beneficial owners

This alert examines a recent resolution of the Presidium of the Supreme Commercial Court of the Russian Federation (“SCC”) dated 26 March 2013 No. 14828/12 on case No. ?40-82045/11 (the “Resolution”). The Resolution addresses...more

Great News! But Don’t Tweet It, Yet

The Securities and Exchange Commission gave the green light last week for companies to share material, nonpublic information with investors over social media – as long as companies disclose beforehand which specific channels...more

SEC Offers Guidance on Use of Social Media for Public Disclosure

On April 2, 2013, the U.S. Securities and Exchange Commission (SEC) issued guidance in the form of the Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934 which indicates that social media...more

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