Tippees and Tippers: The Impact of Martoma II

By John C. Coffee, Jr. July 23, 2018 by renholding

This is a column for insider trading junkies—a special breed who love all the nuances in this very nuanced subject. Late last month, a Second Circuit panel did something fairly unusual: It withdrew a 2017 decision and substituted a new …

SEC’s Jackson Calls for Curbing Executives’ Ability to Cash Out on Buybacks

By Robert J. Jackson, Jr. June 12, 2018 by renholding

Thank you so much, Neera [Tanden], for that very kind introduction. I’ve long admired all that you and everyone here at the Center for American Progress do to promote a progressive economic agenda. And I share your commitment to making

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Post-Earnings Announcement Drift and Corporate Insider Trading

By Christina Dargenidou, Ian Tonks and Fanis Tsoligkas June 5, 2018 by renholding

Post-earnings announcement drift (PEAD) is a well-documented and puzzlingly persistent market anomaly. Companies that report earnings higher than expected typically experience an upward drift in their stock prices while those that report earnings below what was anticipated see a downward …

Latham & Watkins Discusses New SEC Guidance on Cybersecurity

By Jennifer C. Archie and Serrin Turner June 5, 2018 by renholding

With so much boardroom attention on cybersecurity, directors continue to focus on the Securities and Exchange Commission (SEC) guidance issued earlier this year and its implications. The guidance adds specific expectations for disclosure controls and incident response procedures, and reiterates …

Can Adverse Effects of Private Management-Investor Meetings Be Mitigated by Board Independence?

By Robert M. Bowen, Shantanu Dutta, Songlian Tang and Pengcheng Zhu May 7, 2018 by renholding

Private meetings between management and investors (site visits) occur worldwide and are generally held at corporate headquarters with invited investors and sell-side analysts. Ng and Troianovski (WSJ, 2015) report that U.S. investors spend $1.4 billion a year for face time …

Legal Insider Trading in Europe Makes the Case for Enforcement

By Wolfgang Aussenegg, Ranko Jelic and Robert Ranzi May 3, 2018 by renholding

Evidence about the relative importance of private and public enforcement of securities laws for financial markets is inconclusive. The recently introduced Market Abuse Directive (MAD) (2003/6/EC) sets a European Union (EU) standard for regulation of insider dealing and market manipulation. …

Insider Trading’s Legality Problem

By Miriam H. Baer May 1, 2018 by renholding

Last year, when the Supreme Court revisited the topic of insider trading in Salman v. United States, scholars rehearsed a familiar debate: Should Congress enact a statute that explicitly defines insider trading? Or should it stick with the status …

Debevoise Discusses the New SEC Cybersecurity Guidance

By Luke Dembosky, Jeremy Feigelson, Matthew E. Kaplan, Jim Pastore and Paul M. Rodel March 26, 2018 by renholding

On February 21, 2018, the SEC issued new Guidance regarding cybersecurity disclosure and governance requirements applicable to SEC reporting companies. In our earlier Client Update on this topic, we discussed the disclosure considerations addressed in the Guidance. In this Client …

Blue Sky Banter Podcast: Donald Langevoort on Insider Trading, Disclosure, and Disasters

By Reynolds Holding March 2, 2018 by renholding

Professor Donald Langevoort of Georgetown Law speaks with Reynolds Holding about how two duties — the obligation to disclose or abstain from trading on material information and the duty to reveal corporate secrets — evolved from the Second Circuit’s Texas …

Cleary Discusses 2017 Developments in Securities and M&A Litigation

By Jared Gerber, Abena Mainoo, Amanda Ravich, Vanessa C. Richardson and Gregory N. Wolfe February 20, 2018 by charlesbluesky

The trend of increased securities class action filings in federal courts continued from 2016 to 2017.^[1] Federal court filings of class actions related to M&A transactions again contributed to the increase.^[2] Foreign issuers remained frequent targets of federal …

How Shareholder Litigation Affects Firm Disclosure

By Audra Boone, Eliezer Fich and Thomas Griffin February 14, 2018 by renholding

Litigation allows shareholders to seek remedies for fiduciary breaches by managers or directors, such as when there has been a misrepresentation of financial results or illegal insider trading. Twitter, for example, faces a derivative lawsuit alleging that executives provided misleading …

What Happens When an Activist Goes on the Board?

By John C. Coffee, Jr. and Joshua R. Mitts January 29, 2018 by renholding

After over a year of work, which included the review of some 635,450 Form 8-Ks filed by 7,799 public companies from January 1, 2000, to September 30, 2016, we think we know at least one answer to the question in …

Gibson Dunn Offers Securities Enforcement Update for 2017

By Marc J. Fagel January 26, 2018 by renholding

2017 was the prototypical transition year for the SEC. In contrast to many other federal agencies under the current administration, the new SEC leadership did not promise a wholesale rethinking of the agency’s mandate. Rather, they seemed to signal minor …

Preserving Capital Markets Efficiency in the High-Frequency Trading Era

By Gaia Balp and Giovanni Strampelli January 25, 2018 by renholding

Automation and new technology have dramatically changed trading on equity markets over the past 20 years, and algorithmic and High-Frequency Trading (HFT) have become prominent in U.S. and European financial markets, while regulation has been slow to adapt. Despite increasing …

Poetic Expansions of Insider Trading Liability

By John P. Anderson January 19, 2018 by renholding

The courts have consistently held since the Supreme Court decided Dirks v. SEC in 1983[1] that tipper-tippee insider trading liability requires proof that the tipper personally benefited from the tip.

This personal benefit test can pose significant challenges to …

From Texas Gulf Sulphur to Chiarella: A Tale of Two Duties

By Donald C. Langevoort January 8, 2018 by renholding

The Second Circuit’s en banc decision in SEC v. Texas Gulf Sulphur Corp.[1] (“TGS”) is approaching its 50th anniversary, and it’s still well-known for several important holdings. Perhaps the most celebrated (or condemned) accepted the SEC’s argument …

How Five Jurisdictions Enforce Financial Market Manipulation and Insider Trading Laws

By Lev Bromberg, George Gilligan and Ian Ramsay December 18, 2017 by renholding

Insider trading and market manipulation — two of the most high-profile categories of financial misconduct — have resulted in several major cases, and significant sanctions in recent years. Our recent article examines the type, frequency, and severity of sanctions imposed …

Does Insider Trading Law Change Behavior?

By Menesh S. Patel November 15, 2017 by renholding

Despite the extensive scholarship on insider trading, relatively little attention has been directed to a basic but fundamental question: Does insider trading law actually affect the amount of insider trading? In a new article, available here, I seek to …

How to Encourage Dialogue Between Boards and Institutional Investors in the U.S. and the EU

By Giovanni Strampelli October 25, 2017 by renholding

With institutional shareholders playing a growing role in corporate governance, dialogue between boards and shareholders is increasingly common in the U.S. and Europe. Talking with boards is essential to institutional investors’ stewardship functions, and engaging with institutional investors has become …

Insider Tainting: Strategic Tipping of Material Non-Public Information

By Andrew Verstein September 27, 2017 by renholding

In an article forthcoming in the Northwestern University Law Review, I analyze the strategic use of insider trading law to disable the trading activity of an information recipient. I call this phenomenon “insider tainting.” While most tips of information open …

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Columbia Law School's Blog on Corporations and the Capital Markets

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