Companies Rethink Insider Trading Policies After Novel SEC Win

The Wall Street regulator’s victory, likely to eventually reach a federal appeals court, is forcing companies to take a second look at their own insider trading policies. Some have expanded those policies to explicitly address shadow trading, according to a Bloomberg Law search. Others are considering narrowing their prohibitions, hoping to limit employees’ exposure.

“Companies across the board are taking the Panuwat verdict seriously,” said Edward Imperatore, a Morrison & Foerster LLP partner and former federal prosecutor.

The case also raises questions about how much influence companies’ policies have on insider trading law, which can result in civil and criminal penalties. Congress has never defined insider trading, leaving regulators and courts to sketch out its contours.

Source: Companies Rethink Insider Trading Policies After Novel SEC Win