When Should You Abstain? A Call for a Global Rule of Insider Trading

The core concepts of securities regulation tend to be similar across jurisdictions. However, there are differences that may seem small and insignificant at first glance but in fact generate the potential for arbitrage by the kind of sophisticated actors that engage in cross-border mergers and acquisitions.

In a recent paper, we shed light on significant differences in the rules governing the definition of what is material information with regard to unfolding events.

Both the U.S. and European jurisdictions treat information regarding “material” events as important to investors and apply insider trading prohibitions when material information remains nonpublic. Hence, “materiality” … Read more