on insider traders. Over time, the U.S. Supreme Court embraced some of its holdings while rejecting others. Insider Trading and U.S. v. O'Hagan In addition, Texas Gulf Sulphur dealt with insiders known as tippers. 2. The debate over whether a district court has the authority to order disgorgement in an SEC enforcement action dates back to at least the early 1970s when the Second Circuit awarded the SEC disgorgement in Texas Gulf Sulphur, an insider trading case. 1968). TGS built a plant at Big Hill with fourteen 702-horsepower boilers, and on March 19, 1919, the company's Well No. 25 produced the first sulfur. In October a modern company town was completed and named Gulf. TGS began shipping sulfur by rail and by barge. #1- Did any of the following individuals in Texas Gulf Sulphur violate civil or criminal law by breaching a Fiduciary duty or engaging in insider trading: Drake: A geologist and junior member of the exploration group who was authorized with confidential information. Although a number of its rulings subsequently were rejected by the U.S. Supreme Court, others remain good law today. However, case law has made clear that insider trading is the kind of fraud that section 10(b) prohibits. Mail SEC v. Texas Gulf Sulphur Co. Rapide; (4) trading by an insider on the basis of undisclosed inside informa-tion constitutes "special facts." (Fleischer, "Securities Trading and Corporate Information Practices: The Implications of the Texas Gulf Sulphur Proceeding," 51 Va.L.Rev. Over the years, cases have established that, in order to find a person guilty of insider trading under section 10(b), proof of a breached fiduciary relationship is important. In SEC v. Texas Gulf Sulphur, the Second Circuit declared that all investors trading on impersonal exchanges should have equal access to material information, and therefore anyone who possesses material inside information must either turn it over to the investing public or not trade. 1968), cert. SEC v. Texas Gulf Sulphur Co., supra at 278-79. denied, 404 U.S. 1005 (1971); Jennings, Insider Trading in Corporate Securities: A Survey of Hazards and Disclosure Obligations Under Rule 10b-5, 62 Nw. Keeping the discovery quiet, it proceeded to acquire mineral rights in adjacent lands. §78j(b) and 17 C.F.R. 1966). against insider trading would also be sUbject to the -abstain or disclose- prohibitions. The explanation for the ban lies instead in public choice theory because prohibiting corporate officials from trading confers . In 1968, Securities and Exchange Commission v. Texas Gulf Sulphur Co. implicated the employees of a Texas mining company and was the first famous case example of _____. After Texas Gulf, courts widely embraced disgorgement as a remedy. Texas Gulf Sulphur, 401 F2d 833 (2nd Cir. cit. See SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. In 1981 the company was acquired by Elf Aquitaine. Untuk mengetahui perbandingan penentuan Inside Information dalam perkara Texas Gulf Sulphur dengan hukum pasar modal Indonesia. The court [US Court of Appeals for the Second Circuit] contended that the federal insider trading prohibition was intended to assure that 'all investors trading on impersonal exchanges have relatively equal access to material information.' pursued insider trading violations under the general antifraud provisions of the federal securities laws. SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 848 (2d Cir. 25 Texas Gulf Sulphur held that employees, in addition to The TGS opinion rested on a policy of equality of access to information. expansive interpretation of rule 10b-5 under Texas Gulf Sulphur, post-1960s decisions tended toward retrenchment, more strictly construing statutory language and intent in an era of contraction.' 1968), cert. "As a matter of corporate practice, it would be advisable for any insider to forego any trading for, say, an arbitrary twenty-four hour period after important news is released to the public." 1968) (no ting section 10(b) is based “on the justifiable expectation of the securities marketplace that all investors trading on impersonal exchanges have relatively equal access to Transactions in Shares: Rule 10b-5, Insider Trading and Securities Fraud. 1968) (en banc). 25 Texas Gulf Sulphur held that employees, in addition to Texas Gulf Sulphur opinion in 1968 and concluding with the 2016 opinion in Salman v. SEC is examined. See. Section 78j(b), and Rule 10b-5 ( 17 CFR 240.10b-5) (the Rule), promulgated thereunder, and to compel the rescission by the But the Supreme Court rejected that “equal access” basis, instead … Untuk mengetahui perbandingan penentuan Inside Information dalam perkara Texas Gulf Sulphur dengan hukum pasar modal Indonesia. Coates v. SEC, 394 U.S. 976 (1969); Mitchell v. Texas Gulf Sulphur Company, a Texas Corporation, and Charles F. Fogarty, Petitioners, v. the Honorable Willis W. Ritter, Chief Judge of the United States District Court for the District of Utah, and George Gordon Reynolds, Respondents, 371 F.2d 145 (10th Cir. However, at the time of Texas Gulf Sulphur , it was not yet clear that insider trading was punishable as a crime. This The Law and Economics of Insider Trading: A Comprehensive Primer Stephen M. Bainbridge* Abstract Insider trading likely is one of the most common forms of securities fraud, yet it remains one of the most controversial aspects of securities regulation among legal (and economic) scholars. Insider trading, or similar practices, are also regulated by the SEC under its rules on takeovers and tender offers under the Williams Act. is a violation of Rule Iob-5. securities and exchange commission v. Texas Gulf Sulphur Co. United States Court of Appeals 401 F.2d 833 (2nd Cir. Case Study #1 #1- Did any of the following individuals in Texas Gulf Sulphur violate civil or criminal law by breaching a Fiduciary duty or engaging in insider trading: Drake: A geologist and junior member of the exploration group who was authorized with confidential information. Texas Gulf Sulphur Co," and Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, I nc. denied, 394 U.S. 976 (1969). 8 15 U.S.C. ... insiders could easily evade their duty to refrain from trading on the basis of inside information. 1968) (equal access), cert. Texas Gulf Sulphur Co. [3] (a case well known for recognizing that insider trading constitutes a violation of the federal securities laws). KERANGKA TEORI Fungsi dari teori dalam penelitian ini adalah untuk menyusun dan mengklasi fikasikan Law. 1009, 1010 (1966), Fleischer, Securities Trading and Corporation Information Practices: The Implications of …
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