Trial Court Blesses Shadow Insider Trading – Business Law Prof Blog

The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, put it plainly in responding to the jury verdict in the Panuwat case on Friday:

“As we’ve said all along, there was nothing novel about this matter, and the jury agreed: this was insider trading, pure and simple….”

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Yet, many assert that the SEC’s theory in Panuwat broadens the potential for SEC insider trading violations and enforcement.  See, e.g., here, here, and here. They include:

  •  wide class of nonpublic information that may be determined to be material and give rise to an insider trading claim;
  • the expansive scope of insider trading’s requisite duty of trust and confidence (and the potential importance of language in an insider trading compliance policy or confidentiality agreement in defining that duty); and
  • the potentially large number of circumstances in which employees may be exposed to confidential information about their employer that represents a value proposition in another firm’s securities.

Source: Trial Court Blesses Shadow Insider Trading – Business Law Prof Blog