Securities Regulation
Intermediate
Disclose or Abstain
An insider-trading principle requiring a person who possesses material nonpublic information and owes the relevant duty either to disclose it before trading or to refrain from trading.
Why It Matters
The principle links informational advantage to trading restrictions and frames the tradeoff among market confidence, information production, enforcement cost, and the legal source of the duty.
Selected Literature
A short list of directly relevant archive entries.
Related Cases
1968
Securities Regulation
SEC v. Texas Gulf Sulphur Co.
401 F.2d 833 (2d Cir. 1968) (en banc)
Trading while in possession of material nonpublic information and the accuracy of corporate statements about a major mineral discovery.
1980
Securities Regulation
Chiarella v. United States
445 U.S. 222 (1980)
Insider-trading liability and the duty to disclose or abstain.
1983
Securities Regulation
Dirks v. SEC
463 U.S. 646 (1983)
Tippee liability and the conditions under which insider-trading duties attach.
1976
Securities Regulation
TSC Industries, Inc. v. Northway, Inc.
426 U.S. 438 (1976)
Materiality standard for omissions in proxy statements.