This presentation contends that U.S. insider trading law would have been much more coherent, as well as far more effective in attaining Congress’s and the SEC’s policy goals, had the Supreme Court regarded the breach of a fiduciary disclosure duty as a sufficient condition -- rather than a necessary condition -- for insider trading liability under SEC Rule 10b-5.

It further contends that while federal courts can still theoretically broaden their application of the common law in insider trading cases, tradition and the sheer passage of time makes the judiciary unwilling to do so. A new federal statute that would prohibit securities trading on the basis of “wrongfully obtained information” is therefore the best way forward.