December 7, 2010
More SEC Tea Leaves...
Earlier today, the S.E.C. web site announced a new insider trading complaint, this one against a law firm technology manager and his brother-in-law. The case is tantalizing for several reasons.
First, some of the transactions at issue allegedly yielded profits under $2,000, thus belying the notion that only big schemes garner Commission attention.
Second, according to an S.E.C. official, the misappropriation theory utilized is premised on duties to the (unnamed) employer law firm and its clients. Thus, nearly 15 years after O'Hagan, we still don't know precisely whose confidence is betrayed by the trading of an "outsider" in these types of cases.
Finally, all three clauses of Rule 10b-5 (in relation to the activities of both the alleged tipper and tippee) are included in Count One - traditionally, an alleged insider trader was said to violate clauses one and three of the famed prohibition, without reference to the "untrue statements" provision.
The S.E.C. release (with link to Complaint) can be found at www.sec.gov/news/press/2010/2010-240.html.
December 7, 2010 | Permalink