Tag: Shadow Insider Trading

Introduction to SEC v. Panuwat: Understanding “Shadow” Insider Trading by J. W. Verret, Greg Lawrence — SSRN

It is difficult to overstate the expansion Panuwat represents for potential liability for insider trading. To be sure, the defense bar will attack this unfair and unwise regulation-through-litigation, and the defense bar will be joined by academics, public interest groups, and supporters in the business community. In the meantime, every entity and individual involved in the capital markets—from public companies…

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“Shadow” Insider Trading – SEC Wins Jury Trial in Closely Watched Insider Trading Case – Shartsis Friese LLP

It seems certain that the Court’s rulings upholding the SEC’s legal theory, and the jury’s validation of the SEC’s circumstantial case, will embolden the SEC to continue bringing shadow trading cases. Traders therefore need to consider shadow trading in their compliance programs. One of the main challenges shadow trading will present for market participants is the sometimes difficult assessment of…

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Shadow Trading Verdict Is Red Flag for Private, Public Companies

Most private companies don’t have policies addressing insider trading since purchases and sales of company stock is more cumbersome than trading on the open market (and, in many instances, restricted until a public offering or liquidation event). However, an individual need not be an employee of a public company to engage in shadow trading since the concept applies to trading…

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Statement on Jury’s Verdict in Trial of Matthew Panuwat

Today, after an eight day trial and only several hours of deliberation, a jury in the United States District Court for the Northern District of California found Matthew Panuwat liable for insider trading in violation of the federal securities laws. Statement of SEC Division of Enforcement Director Gurbir S. Grewal: “As we’ve said all along, there was nothing novel about…

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An Executive Bought a Rival’s Stock. The SEC Says That’s Insider Trading. – WSJ

Incyte’s stock was strongly correlated with Medivation’s during the year before Panuwat’s trading, according to Daniel Taylor, a professor at the University of Pennsylvania who specializes in insider-trading research. Incyte’s stock increased 8% on the day in August 2016 that Pfizer announced it would acquire Medivation, he said. Panuwat’s case shows that “if you have information about one company, based…

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SEC Defeats Summary Judgment in Insider-Trading Suit Alleging “Shadow Trading” | Corporate Defense and Disputes

The SEC defeated a motion for summary judgment brought by a defendant whom the SEC accused of engaging in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a company not involved in that deal. The November 20, 2023 decision in SEC v. Panuwat (N.D. Cal.) keeps alive the SEC’s theory of “shadow trading,”…

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