Welcome, to our website! Hopefully, this page will incite you to become more knowledgeable about the recent developments in insider trading laws. By definition, insider trading occurs when a company employee or adviser uses material nonpublic information to make a profit by trading in the securities of the company. This practice is considered illegal because it allows insiders to take advantage of the investing public.

Ethics, yes this centers around what is ethical and what is not in the market place. Under the traditional or classic theory of insider trading, a corporate insider, such as an officer, director, or controlling shareholder, has a fiduciary responsibility to the corporation and its shareholders not to disclose nonpublic information. However, as seen in the O'Hagan's Case, the classic theory of insider trading did not fit, because the trader owed no duty to the corporation whose securities he traded. In other words, Mr. O'Hagan had not violated the classic theory of insider trading because neither he or his firm were insiders of the target. Under the Misappropriation Theory, Mr. O'Hagan still holds criminal liability for violating the securities laws.