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To what extent Rule 10b-5 prohibits insider trading is a matter of some dispute. The SEC has long advocated an "equal access theory" with regard to 10b-5, arguing that anyone who has material, non-public information must either disclose that information or abstain from trading.
SEC v. Texas Gulf Sulphur Co. [1] is a case from the United States Court of Appeals for the Second Circuit which articulated standards for a number of aspects of insider trading law under Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5. In particular, it set out standards for materiality of inside information, effective ...
Under Section 10(b) of the 1934 Act, SEC Rule 10b-5, prohibits fraud related to securities trading. The Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988 place penalties for illegal insider trading as high as three times the amount of profit gained or loss avoided from illegal trading. [69]
The rules around insider trading seem simple: Corporate insiders can’t turn a profit or dodge a loss on their stocks while they have pertinent information that regular investors don’t know.
One of the most famous and often used SEC rules is Rule 10b-5, which prohibits fraud in securities transactions as well as insider trading. Interpretations under rule 10b-5 often deem silence to be fraudulent in certain circumstances. Efforts to comply with Rule 10b-5 and avoid lawsuits under 10b-5 have been responsible for a large amount of ...
O'Hagan, 521 U.S. 642 (1997), was a United States Supreme Court case concerning insider trading and breach of U.S. Securities and Exchange Commission Rule 10(b) and 10(b)-5. In an opinion written by Justice Ruth Bader Ginsburg , the Court held that an individual may be found liable for violating Rule 10(b)-5 by misappropriating confidential ...
The SEC's Coinbase insider trading lawsuit is a more complicated case because none of the defendants are crypto firms, but instead, individuals accused of using insider information for personal gain.
SEC Rule 10b5-1, codified at 17 CFR 240.10b5-1, is a regulation enacted by the United States Securities and Exchange Commission (SEC) in 2000. [1] The SEC states that Rule 10b5-1 was enacted in order to resolve an unsettled issue over the definition of insider trading, [2] which is prohibited by SEC Rule 10b-5.