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The Iconic Insider Trading Cases
I’ve posted to SSRN an essay entitled The Iconic Insider Trading Cases:
This essay traces the evolution of insider trading jurisprudence, focusing on the three iconic Supreme Court decisions: Chiarella, Dirks, and O’Hagan. The essay argues that all three cases were seriously flawed because each failed to cohere as to either policy or doctrine. Just as a child might break his toy by attempting to force a square peg into a round hole, the Supreme Court made a hash of insider trading law (and Rule 10b-5 generally) by attempting to force insider trading into a paradigm - securities fraud - that does not fit.
I’ve been over this ground before, of course, but I was asked to revisit the area for a forthcoming anthology.
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I seem to recall reading earlier that you proposed a “theft of property” theory of insider trading with the “property” being information. That might be a better approach from the point of view of theoretical consistency and catching only the “bad” insider trading cases, but does it square with the legislative history of 10(b) and Rule 10b-5 which seems to contemplate a requirement of deception? Theft is often accompanied by deception of course, but not always.