Material Nonpublic Information

News & Analysis as of

The Circuits Are Split: Are Tangible Benefits Required for Insider Trading Liability?

The Ninth Circuit’s recent decision calls into question the Second Circuit’s definition of “personal benefit” for insider trading liability in criminal prosecutions. On July 6, 2015, United States District Court Judge...more

Ninth Circuit Disagrees with Second Circuit on Personal-Benefit Requirement for Insider Trading

The U.S. Court of Appeals for the Ninth Circuit appears to have rebuffed aspects of the Second Circuit's recent effort to narrow liability for insider trading. The Ninth Circuit's decision today in United States v. Salman...more

Personal Securities Transactions Reports By Registered Investment Advisers: Securities Held In Accounts Over Which Reporting...

In a recent Guidance Update, the Staff of the Division of Investment Management of the Securities and Exchange Commission addressed certain issues arising under Section 204A of the Investment Advisers Act of 1940 which...more

SEC Staff Provides Guidance to Clarify Application of Rule Requiring Reporting of Personal Securities Transactions by Investment...

In a June 2015 Guidance Update, the staff of the Division of Investment Management clarified how the code of ethics reporting rules apply to investment advisers. Current rules require certain advisory personnel who...more

Financial Services Weekly News Roundup - July 2015

Regulatory Developments - FINRA Proposes Rule to Require Member Websites to Link to BrokerCheck: FINRA has proposed an amendment to FINRA Rule 2210 to require each of a member’s websites to include a readily...more

Massachusetts Federal Jury Convicts Amateur Golfer for Insider Trading

A federal jury in the District of Massachusetts recently convicted Eric McPhail of securities fraud — one of the first criminal insider trading convictions since the US Court of Appeals for the Second Circuit’s decision in...more

A Compilation of Non-Enforcement Actions

Be Careful to Adhere to Best Practices When Approving Advisory Agreements - The Securities and Exchange Commission instituted and settled an administrative proceeding against an investment adviser, its principal, and...more

SEC Files Another Suspicious Trading Case

Outsized trades continue to draw SEC scrutiny and enforcement actions – even where the agency does not have the evidence to fully plead a claim. Despite the difficulties of these so-called “suspicious” trading cases, in many...more

SEC, USAO File Parallel Insider Trading Charges

The SEC brought an insider trading case against a senior corporate official and a chain of tippes that starts with his brother-in-law broker who then tipped his friend, another broker. Others, not named as defendants, were...more

The Impact of Newman on SEC Enforcement: Part IV

This is the fourth segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases. Post Newman SEC Actions (continued) - 2. Administrative proceedings...more

The Impact of Newman on SEC Enforcement: Part III

This is the third segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases. Post Newman SEC Actions - In the wake of Newman the SEC has three...more

The First, First Circuit Court to Opine on a Newman Challenge

And the Insider Trading Charges Stick - On May 12, 2015, in United States v. Douglas Parigian, U.S. District Court Judge Denise Casper became the first judge in the First Circuit to opine on a challenge to insider...more

Another Insider-Trading Case Survives Newman Scrutiny

Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman. On May 12, 2015, a federal District Court in Massachusetts...more

Insider Trading After United States v. Newman, the Second Circuit’s Landmark Decision Limiting Liability of Downstream Recipients...

The Second Circuit recently dealt a major setback to federal prosecutors’ recent crackdown on insider trading, overturning two high-profile convictions and simultaneously placing the most significant new limits on insider...more

“Friends” Who Trade on Inside Information: How United States v. Newman Changes the Law

In unsuccessfully seeking rehearing in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), reh’g denied, Nos. 13-1837, 13-1917 (2d Cir. Apr. 3, 2015), the government acknowledged that the Second Circuit’s recent decision in...more

Remote Tippees Beware: Even if the DOJ Can’t Reach You After Newman, The SEC Can

The fall-out from the Second Circuit’s decision in U.S. v. Newman continued last week in SEC v. Payton, when Southern District of New York Judge Jed S. Rakoff denied a motion to dismiss an SEC civil enforcement action against...more

Insider Trading: Does Payton Begin the Erosion of the Newman Tipping Test?

The Second Circuit’s decision in U.S. v. Newman, 773 F. 3d 438 (2nd Cir. 2014) regarding the personal benefit test in insider trading either radically altered the law or just reaffirmed the Supreme Court’s decision in Dirks...more

Court Upholds SEC’s Insider-Trading Complaint and Questions Second Circuit’s Newman Decision

U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC. The court held that the SEC’s complaint had...more

More Insider Trading Clarity for Money Managers

It is plainly illegal to bribe a corporate insider for non-public information and then trade that company’s stock. But what if the briber shares that information with a money manager, who then trades on that inside...more

Fourth Circuit Sustains Securities Fraud Claim Against Drug Manufacturer

On March 6, the US Court of Appeals for the Fourth Circuit found that the United States District Court for the Western District of North Carolina had erred in dismissing a class action lawsuit filed under Section 10(b) of the...more

Third Congressional Proposal to Define Insider Trading

On March 25, 2015, U.S. Representative Jim Himes introduced the Insider Trading Prohibition Act. The bill is the latest in a series of efforts to define insider trading following the Second Circuit’s decision last year in...more

SEC Charges Tipping Without A Newman – Dirks Personal Benefit

The U.S. Attorney’s Office in Manhattan is trying to have the Second Circuit’s decision in U.S. v. Newman, No. 13-1837, 13-1917 (2nd Cir. Decided December 10, 2014 ) reheard and reversed. In seeking that rehearing the...more

Full Dissemination of Information–How Many Days?

How many days does it take for material nonpublic information in a press release or an SEC filing to be deemed fully disseminated to, and digested by, the marketplace? The answer can affect, for example, the duration of a...more

The New Insider Trading Landscape: United States v. Newman and Its Impact on Pending Insider Trading Prosecutions

On December 10, 2014, the United States Court of Appeals for the Second Circuit vacated the convictions of two hedge fund portfolio managers for trading on material non-public or “inside,” information that came to the...more

Ontario Securities Commission Wins an Insider Trading Case

In a just-released decision, the Ontario Securities Commission found that a number of individuals engaged in insider trading, acted contrary to the public interest, and misled the Commission during the course of an...more

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