Classical Theory of Insider Trading

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C

Classical Theory of Insider Trading

Definition

A theory under which a corporate insider commits insider trading if she buys or sells securities on the basis of material, nonpublic information acquired in her fiduciary capacity, does not reveal that information to the other party in the transaction, and is under a fiduciary duty to the other party to disclose that information. This is also known as the traditional theory of insider trading.

Related rules

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— United States v. O'Hagan

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