TAILIEUCHUNG - Gale Encyclopedia Of American Law 3Rd Edition Volume 9 P10

Gale Encyclopedia of American Law Volume 9 P10 fully illuminates today's leading cases, major statutes, legal terms and concepts, notable persons involved with the law, important documents and more. Legal issues are fully discussed in easy-to-understand language, including such high-profile topics as the Americans with Disabilities Act, capital punishment, domestic violence, gay and lesbian rights, physician-assisted suicide and thousands more. | 78 SECURITIES cases the persons who made the transactions or persons who passed information to those individuals were found to have violated rule 10b-5. However not every instance of financial unfairness rises to the level of fraudulent activity under rule 10b-5. In Chiarella v. United States 445 . 222 100 S. Ct. 1108 63 L. Ed. 2d 348 1980 Vincent F. Chiarella an employee of a financial printing firm worked on some documents relating to contemplated tender offers. He ascertained the identity of the targeted companies purchased stock in those companies and then sold the stock at a profit once the tender offers were announced. The Supreme Court overturned Chiarella s criminal conviction for violating rule 10b-5 ruling that an allegation of fraud cannot be supported absent a duty to speak and that duty must arise from a relationship of trust and confidence between the parties to a transaction. However following Chiarella criminal convictions of lawyers printers stockbrokers and others have been upheld by courts that have ruled that these employees traded on confidential information that was misappropriated from their employers an issue that was not raised in Chiarella. Moreover courts have also ruled that the person who passes inside information to another person who then uses it for a transaction is as culpable as the person who uses it for his or her own account. The test for materiality in a rule 10b-5 insider information case is whether the information is the kind that might affect the judgment of reasonable investors both of a conservative and speculative bent. Furthermore an insider may not act the moment a company makes a public announcement but must wait until the news could reasonably have been disseminated. The Insider Trading Sanctions Act of 1984 Pub. L. No. 98-376 98 Stat. 1264 and the Insider Trading and Security Fraud Enforcement Act of 1988 15 . 78u-1 806-4a and 78t-1 amended the 1934 act to permit the SEC to seek a civil penalty of three .

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