Abstract

This article, by Professor Peter J. Henning of the Wayne State University Law School, analyzes the haphazard development of insider trading law in the courts. Henning argues that despite Congressional inaction and little by the way of SEC rulemaking, the judiciary has developed a fairly stable set of rules prohibiting insider trading. Henning argues that Salman v. United States demonstrates the Supreme Court’s satisfaction with, or at least apathy to, the current approach in this area of the law. Finally, Henning suggests that without additional political impetus, Congress is unlikely to step in to clarify insider trading law, thus leaving the judiciary to make it up as it goes.

Keywords: statutes, stable, stability, predictability, market evolution, Salman, Supreme Court, circuit courts, lower courts, origins, classic theory, Chiarella, Texas Gulf Sulphur, duty to disclose, material, non-public information, shareholders, misappropriation, O’Hagan, Dirks, 10b5-2, Chestman, fiduciary, benefit, levels removed, SEC, prosecutors