Insider Trading

Trading in securities while possessing material nonpublic information, or trading under legal rules that restrict misuse of informational advantages.

Why It Matters

Insider-trading debates connect market efficiency, liquidity, compensation, fiduciary duties, fairness, enforcement costs, and the boundary between public and private information.

Selected Literature

A short list of directly relevant archive entries.

1970

Introductory

Efficient Capital Markets: A Review of Theory and Empirical Work

Eugene F. Fama

Journal of Finance

Securities Regulation

1983

Advanced

The Regulation of Insider Trading

Dennis W. Carlton and Daniel R. Fischel

Stanford Law Review

Securities Regulation

1992

Advanced

Insider Trading: Should It Be Prohibited?

Hayne E. Leland

Journal of Political Economy

Securities Regulation

2017

Advanced

Securities Regulation

Louis Loss, Joel Seligman, and Troy A. Paredes

Wolters Kluwer

Securities Regulation

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.

1997

Securities Regulation

United States v. O'Hagan

521 U.S. 642 (1997)

Misappropriation theory of insider trading and tender-offer fraud rules.