Misappropriation Theory Of Insider Trading, Dorozhko

Law360, New York (April 4, 2008, 12:00 AM EDT) -- It is commonly understood among securities lawyers that a person who trades on material, nonpublic information is guilty of insider trading.

Compliance personnel at investment banks and hedge funds repeat this edict in mantra-like fashion to the analysts, brokers and traders under their watch – advising them that if they violate this admonition, they risk SEC fines, industry bans, and potentially lengthy prison terms.

Many securities professionals were therefore surprised by a recent case coming out of the Southern District of New York in which the...
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