“Fine Distinctions” in the Contemporary Law of Insider Trading

Abstract

The law of insider trading is evolving in a way that reflects a fundamental conflict between a vision of the prohibition as a moralistic response to greed on the part of the privileged––especially when they occupy roles as fiduciaries––and a vision of the prohibition as akin to more conventional securities fraud.  This Article traces this conflict back to Cady, Roberts, and then examines some contemporary issues that reflect this tension, especially the emergence of a theory of “reckless tipping.”