In the amicus brief, filed Monday according to the WSJ Law Blog, the professors — Alan Bromberg, Allen Ferrell, Jonathan Macey, Todd Henderson and Stephen Bainbridge — argue that “In the context of a business relationship, a confidentiality agreement alone is insufficient to create a fiduciary or similar relationship of trust and confidence between the parties. . . . a confidentiality agreement alone creates only an obligation to maintain the secrecy of the information, not a fiduciary or fiduciary-like duty to act loyally to the source . . . ”
They argue that a rule adopted by the SEC to address when “a breach of a family or other non-business relationship may give rise to liability under the misappropriation theory of insider trading” is inapplicable and contradicts Supreme Court precedent by creating liability without a fiduciary or similar relationship of trust and confidence.