Introduction –
Insider trading traditionally refers to trading public securities based on material nonpublic information (“MNPI”) in breach of a duty of trust, confidence, or loyalty. Liability can arise under multiple overlapping theories, including the classical theory (corporate insiders trading in their company’s securities), the misappropriation theory (outsiders obtaining and misusing a corporation’s confidential information), and tipping liability (individuals improperly sharing MNPI that others use to trade). Where traditional securities statutes do not apply, prosecutors may rely on wire fraud, securities fraud, and commodities fraud to charge deceptive trading activity.
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