Investment Management

Herrick, Feinstein Securities Alert: November 2009


A Rumor vs. Insider Trading — A Line You Don’t Want to Cross: Distinctions Financial Professionals Need to Know

Authors: Steven D. Feldman
Herrick, Feinstein LLP, New York, New York, USA

The F.B.I. and Securities and Exchange Commission are focusing on insider trading among financial industry professionals—hedge fund traders, analysts, stock brokers and company insiders.  The cases focus on industry professionals who use a network of industry contacts to gather information on a company.  Potentially, a trader may come across a piece of problematic information when building a big picture mosaic about the company.  In these situations, ignorance of the basic rules can expose you or your company to monetary and criminal liability.  You build your overall assessment of an investment with many pieces of information.  What if one out of a hundred constitutes insider information? Below, we look at certain "grey areas" of the law to help you avoid crossing the line. Click here to read the entire alert.

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