Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Material Information
Material information is information which a reasonable investor would view as important in making an investment decision.
Basic Inc. v. Levinson, 485 U.S. 224 (1988)
Nonpublic Information
Generally defined as information that has not been disclosed to the public. Other definitions conclude that information becomes public once it has been publicly disclosed and adequate time has passed for the securities markets to absorb the information.
Enforcement
Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has treated the detection and prosecution of insider trading violations as one of its enforcement priorities. -U.S. Securities and Exchange Commission Civil Penalties of 3x the profit realized or loss averted by virtue of trade. 15 USC 78u-1 Criminal Penalties of up to 20 years imprisonment and $5,000,000 in fines. Controlling Person Liability
Civil greater of $1 million and 3x profit or loss Criminal- Up to $25 million Controlling person knew or recklessly disregarded the fact that the controlled person was likely to engage in the act or acts [of violating the law] and failed to take appropriate steps to prevent the act or acts before they occurred.
Bounty Hunters
SEC is authorized to award a bounty to a person who provides information leading the recovery of a civil penalty from an inside trader. 15 USC 78u-I(e) Award of up to 10% of civil penalty assessed against inside trader.
SEC alleged that Agarwala used this information to purchase and sell Maxim stock. Agarwala settled the case by agreeing to pay $14,784 for illegal trading profits and losses avoided and a civil penalty of $29,568.
Conclusion
Insider trading is not limited to Wall Street Information obtained in performing medical research is likely confidential.
Duty of confidentiality owed to sponsor.
Using information obtained during the course of medical research to buy or sell publicly traded stocks may constitute insider trading. The researcher may be subject to civil and criminal penalties. The Marshfield Clinic may be subject to civil and criminal penalties as the controlling person.