News & Analysis as of

Material Nonpublic Information Rule 10b-5

Holland & Knight LLP

Shady Days: SEC Secures Another Insider Trading Stat on Shadow Trading Theory

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The U.S. District Court for the Northern District of California on May 30, 2024, approved a settled final judgment against technology company Arista Networks' former chairman and CEO, Andreas "Andy" Bechtolsheim based on...more

Kramer Levin Naftalis & Frankel LLP

SEC Secures Jury Verdict in Shadow Insider Trading Trial

On April 5, 2024, a federal jury in San Francisco returned a verdict in favor of the Securities and Exchange Commission (SEC) in Securities and Exchange Commission v. Panuwat. The jury found that a corporate executive had...more

Miller Canfield

Redefining Insider Trading: The SEC's Groundbreaking Theory in the Panuwat Case

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In SEC v Panuwat, a federal jury in California will hear a novel insider trading theory that the court has allowed to proceed to trial. In Panuwat, the SEC says it is unlawful for an individual to purchase securities of a...more

WilmerHale

The Second Circuit's Blaszczak Decision Fails to Resolve One Issue, Raises New Ones

WilmerHale on

On December 27, 2022—nearly 18 months after hearing oral arguments—the Second Circuit issued its new opinion in United States v. Blaszczak, an important insider trading case involving the misappropriation of confidential...more

Eversheds Sutherland (US) LLP

SEC amends Rule 10b5-1 and revamps affirmative defense to insider trading charges

The Securities and Exchange Commission (SEC) has unanimously adopted amendments to Rule 10b5-1 (the Rule), which prohibits the purchase or sale of securities on the basis of material nonpublic information (MNPI) in violation...more

Cooley LLP

Finally, a unanimous vote—SEC adopts new rules on 10b5-1 plans

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At an open meeting yesterday, the SEC voted to adopt new rules regarding Rule 10b5-1 plans. The vote was unanimous—albeit somewhat grudgingly in one case. Still, the notion of unanimity on an important Corp Fin regulation has...more

BCLP

Flawed 10b5-1 plan leads to insider trading finding against executives

BCLP on

A recent SEC order found that two executives of Cheetah Mobile Inc. engaged in illegal insider trading when selling shares under a purported 10b5-1 trading plan. The SEC found that they established the plan after learning of...more

BakerHostetler

SEC and DOJ Bring Parallel Crypto Insider Trading Cases; SEC Alleges Nine Coinbase-Listed Tokens Are Securities

BakerHostetler on

Significant parallel actions commenced this week by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) bring crypto fraud enforcement into the spotlight, with the SEC alleging that multiple...more

Akin Gump Strauss Hauer & Feld LLP

SEC Division of Examinations (Finally) Speaks on Alternative Data

Key Points - The SEC’s Division of Examinations published a risk alert that, in the context of a focus on MNPI, highlighted observed deficiencies related to the use of alternative data by private fund managers and other...more

Skadden, Arps, Slate, Meagher & Flom LLP

Revisiting Share Repurchases in Volatile Times

In light of the recent increased volatility in the global financial markets, a number of companies have raised questions regarding the desirability of repurchasing shares at reduced market prices. This alert addresses...more

Woodruff Sawyer

Shadow Trading: The SEC’s New Angle on Illegal Insider Trading

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Everyone knows that employees cannot buy or sell securities while in possession of material nonpublic information. However, when we think about material non-public information, we usually think in terms of information...more

Patterson Belknap Webb & Tyler LLP

SEC Shadow Trading Case Breaks Ground – But There Remains a Trail to Blaze

A California Court recently allowed the Securities and Exchange Commission (the “SEC” or “Commission”) to proceed with its first insider trading prosecution based on a theory of “shadow trading.” On January 14, 2022, Judge...more

Venable LLP

Novel SEC "Shadow Trading" Theory Expands Insider Trading Liability

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The SEC recently unveiled a novel "Shadow Trading" theory that expands insider trading liability. "Shadow Trading" describes when an insider with material, non-public information regarding their own company uses that...more

Akin Gump Strauss Hauer & Feld LLP

New Shadow Trading Enforcement Lessons For Private Funds

The U.S. Securities and Exchange Commission has a long history of adopting novel theories in litigation to convince the courts to expand the scope of the federal insider trading laws. The SEC's latest effort comes in an...more

Akin Gump Strauss Hauer & Feld LLP

New “Shadow Insider Trading” SEC Enforcement Action -- Four Lessons for Private Fund Managers

Last week, the U.S. Securities and Exchange Commission filed a complaint in federal court in California premised on the novel legal theory that the insider trading laws apply where an insider uses confidential information...more

Katten Muchin Rosenman LLP

SEC Chairman Announces Plans for Further Regulation of Rule 10b5-1 Plans

On June 7, Securities and Exchange Commission (SEC) Chairman Gary Gensler announced plans to revise rules governing Rule 10b5-1 plans. Rule 10b5-1 plans provide executive insiders with a defense against insider trading claims...more

A&O Shearman

Federal Court Denies Motion To Dismiss Section 20A Insider Trading Claims, Finding Plaintiffs Sufficiently Pleaded Scienter Where...

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On July 1, 2019, Judge Michael A. Shipp of the United States District Court for the District of New Jersey denied a motion to dismiss a complaint alleging insider trading in violation of Section 20A of the Securities Exchange...more

WilmerHale

Insider Trading Law Alert: Better The Devil You Know? Tipping Liability, Martoma and the Rise of 18 U.S.C. § 1348

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Insider trading has frequently been splashed across headlines in recent months, with a congressman, an NFL player, a comedy writer, and a Silicon Valley executive all facing charges. In the background of these headlines are...more

Dorsey & Whitney LLP

Equifax Data Breach: Preliminary Lessons for the Adoption and Implementation of Insider Trading Policies

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Insider trading allegations have surfaced at Equifax, a credit rating agency that last week announced a data breach that could potentially affect 143 million consumers in the United States, nearly half of the country’s...more

Parker Poe Adams & Bernstein LLP

Revisiting Rule 10b5-1 Trading Plans

I am sometimes surprised by the number of insiders who trade in their company’s stock outside of Rule 10b5-1 trading plans. It is often said, with some accuracy, that executive officers, directors and other insiders always...more

Proskauer - Corporate Defense and Disputes

First Circuit Affirms Another Insider-Trading Conviction

On July 26, 2016, the U.S. Court of Appeals for the First Circuit affirmed another conviction in a pair of appeals arising from insider-trading prosecutions. The decision in United States v. McPhail confirms that, under...more

Morrison & Foerster LLP

2014 Insider Trading Annual Review

Overview of Insider Training Law - “Insider trading” is an ambiguous and overinclusive term. Trading by insiders includes both legal and illegal conduct. The legal version occurs when certain corporate insiders –...more

BakerHostetler

The Boundaries for Insider Trading Prosecutions See a Resurgence: The 1980s Are Back!

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In a closely followed appeal, the United States Court of Appeals for the Second Circuit on December 10, 2014, delivered an important decision in United States v. Newman by vacating the insider trading convictions of two...more

Perkins Coie

Searching for Greener Pastures: SEC Insider Trading Enforcement in a Post-Newman Era

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In United States v. Newman, the U.S. Court of Appeals for the Second Circuit dealt a substantial blow to federal prosecutors’ epic crackdown on insider trading by raising the bar for the government’s burden of proof in...more

Akin Gump Strauss Hauer & Feld LLP

Court Of Appeals Reins in Prosecutors in Insider Trading Cases

In a landmark insider trading decision issued on December 10, 2014, the U.S. Court of Appeals for the 2nd Circuit made important pronouncements favorable to the defense on two recurring and important legal issues: (1) what is...more

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