1. Insider Trading

2. Abuse of Position Vague term, includes actions of Ebbers, Kozlowski.
also includes insider trading

3. Foster Winans – Case 10.2

4. Insider Trading, df.
Stock trading on the basis of material, non-public information.
E.g., Texas Gulf Sulphur

5. Martha, Erbitux, ImClone, Waksal

6. When can outsiders be prosecuted for it?
Tip on the bus
Chiarella (financial printer)
O’Hagan
No: bus tip, Chiarella
Yes: O’Hagan

7. Bottom line:
Outsiders prosecutable when source of info has fiduciary obligation to corporation and trader knows this.

8. Why is it Wrong? Manne – it’s not. Misappropriation view.
Text: executives who do it put their interests above those of shareholders.
Fairness argument