Insider Trading

What this video covers

• The two-part MNPI test: what makes information material versus nonpublic, and why selective disclosure to a few investors does not satisfy the public dissemination requirement
• The disclose-or-abstain rule for corporate insiders, and why trading while keeping MNPI secret breaches a fiduciary duty to shareholders
• How outsiders commit insider trading through misappropriation of confidential information from a source they owe a duty to, such as a law firm or client, even without being a corporate insider
• Tipper liability: why a personal benefit flowing back to the tipper is required, and how that benefit can be monetary, reputational, or relational rather than strictly cash
• Tippee liability: why knowing or should have known about the duty breach matters, and why ignorance of the specific personal benefit received by the tipper is not a valid defense
• The mosaic theory: why combining and analyzing publicly available information through skill and research creates legitimate trading insight rather than an MNPI violation
• The four-element checklist for an insider trading conviction, and why possession of MNPI without an executed trade is never a violation on its own