Icahn Investigation Highlights Gray Area Of Securities Law

By Kaitlyn Kiernan (June 3, 2014, 6:43 PM EDT) -- Activist private equity and hedge fund investors who take large stakes in companies to put pressure on management can provoke big stock swings with a simple holdings disclosure or a tweet, but since those managers aren't insiders, they fall into a gray area for securities suits under U.S. insider trading laws as highlighted by recent scrutiny of Carl Icahn and Bill Ackman.

"There is increased scrutiny on activity that some don't think passes the smell test, but when you look at the facts, it doesn't rise to the level of insider trading under" U.S. Securities and Exchange Commission rules, said Andrew...

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