3 ms·

The duty that has been breached is to Capital One in this case, as established by case law.

by foobarqux 12y ago

tptacek 12y ago
See third paragraph of my comment. :)
- foobarqux 12y ago
  If I read it correctly your third paragraph describes how things should work. I'm saying that misappropriating 3rd party information has already been established by case law to be insider trading.
  - tptacek 12y ago
    I might be wrong, but let me venture this: No. US v O'Hagan did not establish misappropriation as "insider trading". It established it as fraud, and as an SEC §10(b), which covers a broad range of securities fraud that is not describable as insider trading. The syllabus for the case itself seems to be at pains to distinguish misappropriation from insider trading. The importance of the distinction is that the Capital One case is something the spirit and letter of the law wants to deter, while satellite imagery of commercial activity isn't, despite it too being an example of market actors leveraging their own access and assets to gain an advantage in the market. I eagerly await correction. :)
    - dynamic 12y ago
      If this is just a terminology debate, O'Hagan-style misappropriation theory cases are called "insider trading" cases by nearly everyone, including the SEC[1], the Justice Department[2] and the SDNY (a judge recently issued an opinion discussing "insider-trading cases prosecuted under a misappropriation theory"). They are usually contrasted with "classical theory" insider trading cases. [1] http://www.sec.gov/answers/insider.htm http://www.sec.gov/answers/insider.htm [2] http://www.justice.gov/usao/nys/pressreleases/December13/WeishausDavidPleaPR/Conradt,%20Thomas%20C.%20and%20David%20J.%20Weishaus%20Indictment12%20Cr%20887.pdf http://www.justice.gov/usao/nys/pressreleases/December13/Wei...
      - tptacek 12y ago
        Conceding! Conceding! Eject! Eject! Eject! :)
    - foobarqux 12y ago
      I believe that misappropriation theory is jurisprudence developed from 10(b) so a defendant would be found guilty with respect to 10(b), a "fraud". http://www.sec.gov/answers/insider.htm http://www.sec.gov/answers/insider.htm (search for "lawyers") http://en.wikipedia.org/wiki/Insider_trading#Misappropriation_theory http://en.wikipedia.org/wiki/Insider_trading#Misappropriatio... http://meyersandheim.com/how-to-win-an-insider-trading-case/ http://meyersandheim.com/how-to-win-an-insider-trading-case/ (misappropriation section)
      - tptacek 12y ago
        The misappropriation references in this speech: http://www.sec.gov/news/speech/speecharchive/1998/spch221.htm http://www.sec.gov/news/speech/speecharchive/1998/spch221.ht... also clarify the relationship, which according the SEC revolve around the obligations of "trust and confidence". I got the alternate impression from reading the O'Hagan syllabus and 10b-5 itself. Oh well!. I've pushed this point far past a point at which I'm comfortable defending it. :)

The duty that has been breached is to Capital One in this case, as established by case law.

tptacek 12y ago

See third paragraph of my comment. :)

foobarqux 12y ago
If I read it correctly your third paragraph describes how things should work. I'm saying that misappropriating 3rd party information has already been established by case law to be insider trading.
- tptacek 12y ago
  I might be wrong, but let me venture this: No. US v O'Hagan did not establish misappropriation as "insider trading". It established it as fraud, and as an SEC §10(b), which covers a broad range of securities fraud that is not describable as insider trading. The syllabus for the case itself seems to be at pains to distinguish misappropriation from insider trading. The importance of the distinction is that the Capital One case is something the spirit and letter of the law wants to deter, while satellite imagery of commercial activity isn't, despite it too being an example of market actors leveraging their own access and assets to gain an advantage in the market. I eagerly await correction. :)
  - dynamic 12y ago
    If this is just a terminology debate, O'Hagan-style misappropriation theory cases are called "insider trading" cases by nearly everyone, including the SEC[1], the Justice Department[2] and the SDNY (a judge recently issued an opinion discussing "insider-trading cases prosecuted under a misappropriation theory"). They are usually contrasted with "classical theory" insider trading cases. [1] http://www.sec.gov/answers/insider.htm http://www.sec.gov/answers/insider.htm [2] http://www.justice.gov/usao/nys/pressreleases/December13/WeishausDavidPleaPR/Conradt,%20Thomas%20C.%20and%20David%20J.%20Weishaus%20Indictment12%20Cr%20887.pdf http://www.justice.gov/usao/nys/pressreleases/December13/Wei...
    - tptacek 12y ago
      Conceding! Conceding! Eject! Eject! Eject! :)
  - foobarqux 12y ago
    I believe that misappropriation theory is jurisprudence developed from 10(b) so a defendant would be found guilty with respect to 10(b), a "fraud". http://www.sec.gov/answers/insider.htm http://www.sec.gov/answers/insider.htm (search for "lawyers") http://en.wikipedia.org/wiki/Insider_trading#Misappropriation_theory http://en.wikipedia.org/wiki/Insider_trading#Misappropriatio... http://meyersandheim.com/how-to-win-an-insider-trading-case/ http://meyersandheim.com/how-to-win-an-insider-trading-case/ (misappropriation section)
    - tptacek 12y ago
      The misappropriation references in this speech: http://www.sec.gov/news/speech/speecharchive/1998/spch221.htm http://www.sec.gov/news/speech/speecharchive/1998/spch221.ht... also clarify the relationship, which according the SEC revolve around the obligations of "trust and confidence". I got the alternate impression from reading the O'Hagan syllabus and 10b-5 itself. Oh well!. I've pushed this point far past a point at which I'm comfortable defending it. :)