The Newman-Chiasson Insider Trading Case Reinforces the Need for Change

The recent reversal of convictions of hedge fund managers Todd Newman and Anthony Chiasson highlights the weakness of using a common law approach when interpreting Rule 10b-5 to reach remote tippees accused of insider trading. The decision reinforces the need for a statutory approach to bar insider trading. A statutory approach is not a novel idea. Most jurisdictions around the world, including the UK and the other member states of the EU, have made insider trading a statutory offense that captures a wider range of conduct than does the US regime in its reliance upon Rule 10b-5. However, the introduction … Read more