More on Insider Trading – From Prof. Steve Bainbridge

Prof. Bainbridge has three posts on the Supreme Court Salman case.  The posts really show how unclear the concept of Tippee is.  The posts are here, here and here.

There was a 10b(5) issue on the final exam.  The “trader” was on the board of the company whose shares he was trading so he was clearly a “certain” person when he sold the shares to Zack, meaning he had a duty to disclose or not trade.  The issue was whether the “info” he had was “material non-public information.”  The info you say?  Essentially all financial info of the company that was material and non-public plus the fact that he, the seller, thought the other shareholder was lazy.

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