Insider Trading and Trading Restrictions Around Tender Offers
Chapters in this video
- 0:00 The fiduciary duty trap and why it matters
- 0:40 Blake the banker and the printer-employee fact pattern
- 1:42 Comparing tender-offer rule and general anti-fraud regime
- 2:02 The parity-of-information principle and substantial steps trigger
- 3:21 The net-long rule and Val's partial tender loophole
- 4:47 Outside purchase prohibitions and the blackout timeline
- 5:47 Ingrid's issuer self-tender and the 10-day extension
- 6:27 Rapid-fire exam recap
What this video covers
- Why the tender-offer insider trading rule does NOT require a fiduciary breach, and how this differs from the general anti-fraud insider trading regime
- How the 1980 SEC rule filled the gap left by Chiarella v. United States for financial printers and other non-fiduciaries
- What triggers the tender-offer insider trading prohibition: substantial steps toward the offer, not merely public announcement
- How to compute the net-long position for partial tender offers by subtracting short shares from long shares
- Why the net-long rule applies identically to both broker-dealer proprietary accounts and customer accounts
- Which covered persons are trapped by the outside-purchase blackout from announcement through offer expiration
- Why an issuer self-tender extends the outside-purchase ban 10 business days past termination, unlike a third-party bidder
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