About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Federal Securities Law: Insider Trading, January 30, 2002 1 (January 30, 2002)

handle is hein.tera/crser0181 and id is 1 raw text is: Order Code RS21127 January 30, 2002 CRS Report for Congress Received through the CRS Web Federal Securities Law: Insider Trading Michael V. Seitzinger Legislative Attorney American Law Division Summary Insider trading in securities may occur when a person in possession of material nonpublic information about a company trades in the company's securities and makes a profit or avoids a loss. The Securities Exchange Act of 1934 and the Insider Trading Sanctions Act of 1984 have provisions which forbid insider trading. One provision of the 1934 Act requires the disgorgement of short-swing profits by named insiders. The 1934 Act's general antifraud provision has been used many times to sanction insider trading. In addition, in 1984 Congress enacted legislation imposing up to treble damages upon one who engages in insider trading. Insider trading in securities may occur when a person in possession of material nonpublic information about a company trades in the company's securities and makes a profit or avoids a loss. Two federal statutes have provisions which forbid insider trading: the Securities Exchange Act of 1934 and the Insider Trading Sanctions Act of 1984.2 One provision in the Securities Exchange Act is specifically designed to discourage insiders in the corporation from taking advantage of their inside information in the trading of the corporation's securities. Section 16 of the 1934 Act3 places sanctions upon insiders who use inside information in making short-swing profits. For purposes of this provision, an insider is defined as any person who is directly or indirectly the beneficial owner of more than 10 per centum of any class of any equity security...which is registered...or who is a director or an officer of the issuer. Every such person must file a report with the Securities and Exchange Commission at the time of the registration of the security on a national securities exchange or by the effective date of a filed registration statement or within ten days after he becomes a beneficial owner, director, or officer and within ten 15 U.S.C. §§ 78aet seq. 2 P.L. 98-376, codified in a number of provisions of 15 U.S.C. §§78a et seq. 15 U.S.C. § 78p. Congressional Research Service *-° The Library of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most