Category: Jury Verdicts


SEC v. Jacobs May Signal Limit to Duty of Trust or Confidence Required to Prove Insider Trading Based on Misappropriation Theory

Posted on March 20th, by and in Insider Trading, Jury Verdicts, Misappropriation, Relationship of Trust and Confidence. Comments Off on SEC v. Jacobs May Signal Limit to Duty of Trust or Confidence Required to Prove Insider Trading Based on Misappropriation Theory

To prevail on an insider-trading claim pursuant to Section 10(b) of the Exchange Act and Rule 10b-5 thereunder based on the misappropriation theory, the SEC must prove that the defendant (1) misappropriated material, nonpublic information; (2) had a duty of trust or confidence; (3) breached that duty; (4) purchased or sold securities, or tipped another who purchased or sold securities, on the basis of that information; and (5) knew or should have known that he or she was trading or tipping others on inappropriately obtained information. Dirks v. SEC, 463 U.S. 646, 660 (1983). The SEC has identified three nonexhaustive circumstances that create a duty of trust or confidence; they are (1) when a person agrees to maintain information in confidence; (2) when there is a history, pattern, or practice of sharing confidences and the recipient knows or reasonably should know … Read More »




From the Blog:

SEC says Bitcoin and Ether are not Securities

“I believe every ICO I’ve seen is a security and we have jurisdiction and our federal securities laws apply.” Clayton, J., Testimony, Sen. Banking,...

Department of Justice Announces New Policy on Coordination of Enforcement Actions and Corporate Penalties

The Department of Justice has established a new policy that requires its attorneys to coordinate with one another and with other enforcement authorities when...

SEC Chief Accountant Shines Spotlight on Audit Committees

SEC Chief Accountant Wesley Bricker spoke before the Baruch College Financial Reporting Conference on May 3, 2018. As in recent presentations, Mr. Bricker commenced...