Course Details

Insider Trading

This course entails a comprehensive review of the law of insider trading. The focus is on Securities and Exchange Commission (SEC) and Department of Justice enforcement of the federal prohibition on insider trading, which is based primarily on the application of SEC Rule 10b-5. The course begins with a review of the common law background and current state law pertaining to securities trading by insiders. The course then turns to the development by the Supreme Court and lower courts of what does and what does not constitute unlawful trading based on, and tipping of, nonpublic information that is material to a securities transaction. Other topics include the special rule prohibiting trading based on material nonpublic information relating to tender offers (SEC Rule 14e-3), SEC Regulation FD (Fair Disclosure), and short-swing profit recovery from insiders under Securities Exchange Act Section 16(b). The course concludes with a review of the policy debate regarding prohibiting some or all insider trading, including proposed legislation to reform the law. Registration Requirements: No prerequisites. Any necessary background in the securities laws will be provided as part of the course materials and lectures. Evaluation Method: Each student is required to take a final examination (three-hours, open book with restricted access to the Internet). A student who successfully completes this course may later take the Securities Regulation: Liability and Enforcement course for full credit. The exam will count for at least 70% of the final grade. Class participation will count for up to 30% of the final grade. Class Materials: Stephen M. Bainbridge, INSIDER TRADING LAW AND POLICY (Foundation Press 2014) (paperback), ISBN 978-1-60930-430-0. There is also a Coursepak consisting of Chapter 7 (only) of Nagy, et al., SECURITIES LITIGATION AND ENFORCEMENT CASES AND MATERIALS (4th ed. 2017). There is no need to purchase the entire Nagy et al. text, unless you intend to take the spring course on Liability and Enforcement, where that is the primary text. Other materials, including edited cases not in the Coursepak, will be posted on Canvas or URL/Westlaw citations will be provided.

Catalog Number: BUSCOM 718


Course History

Fall 2017
Title: Insider Trading
Faculty: Horwich, Allan (courses | profile)
Section: 1     Credits: 3.0
Capacity: 65     Actual: 14

Fall 2016
Title: Insider Trading
Faculty: Horwich, Allan (courses | profile)
Section: 1     Credits: 3.0
Capacity: 65     Actual: 26

Fall 2015
Title: Insider Trading
Faculty: Horwich, Allan (courses | profile)
Section: 1     Credits: 3.0
Capacity: 25     Actual: 18