Sky Blog
One of the many significant reforms enacted in The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 was the creation of a whistleblower bounty program within the SEC. The program increased monetary rewards for whistleblowing and provided protections …
In 2012, Mary L. Schapiro, the chairwoman of the Securities and Exchange Commission, argued that market participants had “short memories” and that the SEC as a result had to take regular enforcement actions “so that people don’t forget that they …
The COVID-19 pandemic has dramatically changed how businesses operate, resulting in unprecedented stock market effects. While the U.S. stock market has historically shown little to no reaction to an infectious disease outbreak, COVID-19 precipitated a global stock market downturn now …
For a brief moment last month, Kodak Corporation’s stock soared from $2 a share to more than $33 a share on news that it might obtain substantial government financing. At that peak, Kodak director George Karfunkel unloaded shares then worth …
To many, the core securities laws on disclosure, fraud, and insider trading are desirable from an investor-protection perspective. But the dominant law and economics view is dubious of this thinking. Under this view, securities prices are discounted to reflect obstacles …
Dirks v. SEC established the fraud claim for tipping as part of the insider trading prohibition in the federal securities laws. An essential element of the claim was proof that the insider personally benefited from disclosing confidential information to the …
Following news reports about executives selling shares in their corporations to avoid losses due to the pandemic, we take a closer look at insider trades and find that net insider purchases have been positive in February and March, revealing corporate …
Labor is an important corporate stakeholder and crucial to a company’s wealth and long-term productivity. Yet the investment of human capital in a corporation is not diversified and depends on the company’s profitability. If the corporation collapses and layoffs follow, …
The coronavirus’ impact across the United States will make an epic, even Tolstoyan, saga, sweeping across all levels of American society and featuring brave heroes and tragic victims. But so far, this story has lacked one figure that every drama …
In response to accusations Friday of trading on non-public information about the coronavirus, Senator Richard Burr of North Carolina asserted independent and lawful grounds for unloading between $628,000 and $1.72 million worth of stock. “I relied solely on public news …
The law of insider trading generally moves with the speed of molasses in February. For every two steps forward, there is one (or more) steps backward. But this winter has seen a rapid succession of developments. First, the Himes Bill …
The U.S. Securities and Exchange Commission (SEC) has a three-part mission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. SEC investigations and enforcement actions play a critical role in carrying out each of these objectives. …
For too long, insider trading law has lacked clarity, generated confusion, and failed to keep up with the times. Without a statute specifically directed at insider trading, the law has developed through a series of fact-specific court decisions …
To assist legal and compliance officers of financial institutions, this memorandum summarizes key recent developments in criminal prosecutions and regulatory enforcement actions involving financial institutions during November and December 2019.
Among the significant matters and trends:
A major issue in United States v. Blaszczak, 2019 WL 7289753 (2d Cir.), was whether the government needed to prove the elements of a Rule 10b-5 tipping violation from Dirks v. SEC, 463 U.S. 646 (1983), when charging …
Insider trading is back in the news, although some would argue it never left. Last month, the U.S. House of Representatives passed the Insider Trading Prohibition Act, which seeks to create a new provision, Section 16A of the 1934 Securities …
Does regulation deter insider trading? This has been a controversial question, with mixed empirical findings. One set of studies finds that insider trading regulations have been effective in reducing the frequency and profitability of opportunistic trades (e.g., Agrawal and Jaffe …
Tying executive pay to corporate performance has become increasingly important in creating incentives for corporate managers. Theoretical models argue that compensation contracts that reward managers contingent on performance, especially performance relative to peer firms, can increase managerial effort (e.g., Holmstrom, …
In a new article, I use network theory to show that there is a hidden link between insider trading and macroeconomic risk. I suggest that current laws on insider trading increase the level of macroeconomic risk for the economy, and …
In a forthcoming paper, we explore the stock prices of companies during the period just before to just after an announcement that they have been hit with a computer breach. We analyze all available public equity data by breach type …