In a recent paper, I compare the legal treatment of outsider trading under US and EU law. Outsider trading can be defined as the sale or purchase of listed securities on the basis of material nonpublic information by individuals who do not qualify as insiders. There is substantial (and so far largely unnoticed) divergence between EU and the US in this area of securities regulation.
In both systems outsider trading, like more ordinary insider trading, is subject to severe restrictions. In the US, however, the trading prohibition has a limited scope. It applies selectively, only if certain conditions are … Read more