What If You Could Draft an Insider Trading Law?

Recently, U.S. District Judge Jed S. Rakoff urged passage of a statute prohibiting insider trading. Currently judicial decisions define the boundaries of the law which is based on anti-fraud provisions of the Securities Exchange Act. This, the judge believes, creates “unnecessary uncertainty” as prosecutors try to “shoehorn” what should be a “cheating” concept into a “fraud” framework. In contrast, in the EU, trading on non-public information is prohibited (in order to provide for equal market access) without requiring that the source of the information “breach” a fiduciary duty.

What do litigators think of this suggestion? RFG asked several industry experts. We thought you might be interested in their responses, which can be found in our article addressing the issue here. This and other topics of interest to endowments and other investors will be discussed in a conference on April 6 in Washington, DC, which will focus on how evolving public policy issues may impact endowments and the non-profit sphere.

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