Insider Trading

An Overview

by John Teakell Attorney-At-Law
Dallas, Texas

INTRODUCTION

In a civil enforcement action, "10(B) and 10b-5" are essentially the basic cause of action and the civil "remedy" is provided through the "The Insider Trading and Securities Fraud Enforcement Act of 1988." So, for your case, the prima facie elements of what the SEC must prove come from 10(B) and 10b-5 (given my understanding of the facts of your case). And, if proven, the SEC's authority to impose a civil penalty arises from the "The Insider Trading and Securities Fraud Enforcement Act of 1988."

Please see U.S. v. Causey, (S.D. Tex 2005), which sets forth the prima facie case for 10(B) and 10b-5 before turning to the memo. This memo is a compilation of treatise articles, case excerpts, and case headnotes, which it intended to provide an overview. Please let is know if any specific research questions arise, and we will be glad to track down the specific answer. Also, let us know if you want us to send you any of the cases, statutes, or documents cited herein. (Many of the footnotes from the articles have been omitted in order to shorten the memo—please let us know if you want any of the footnotes or sources cited by the footnotes.)

TABLE OF CONTENTS

1. "Insider" element
2. "Material" element
3. Treatise Article concerning the Insider Trading Sanctions Act of 1984
4. Treatise Article concerning the Insider Trading and Securities Fraud Enforcement Act of 1988
5. Copy of the Insider Trading and Securities Fraud Enforcement Act of 1988-Pages
6. A cross section of cases that deal with various issues that are raised by the 1988 Act, which appear in the form of Westlaw headnote summaries.
7. Compilation of recent securities caselaw.