United States Supreme Court
445 U.S. 222 (1980)
Chiarella (defendant) was an employee for a printing company that handled documents concerning corporate takeovers. The companies to be acquired were redacted until the final draft of such takeover agreements. In one instance, Chiarella was able to discover the companies involved in a takeover bid through the information provided in the draft takeover agreement. He then traded on this information, which was not public, and enjoyed earnings of $30,000. When it was discovered he was trading on nonpublic information, the United States (plaintiff) brought charges against him for violation of § 10(b), prohibiting fraud based on his nondisclosure of information. The district court convicted Chiarella of insider trading. The court of appeals affirmed Chiarella’s conviction. Chiarella then petitioned for certiorari to the United States Supreme Court.
Rule of Law
Holding and Reasoning (Powell, J.)
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