“It’s Just Not Right”: The Ethics of Insider Trading

The Supreme Court doctrine defining insider trading and a competing theory called the misappropriation theory are criticized, focusing on the case of United States vs Chestman. A counter-argument is presented

Protection of Intellectual Property while Outsourcing

Food and Beverage companies need to share their Intellectual Property (IP) when they outsource production and/or R&D to contract agents. IP sharing can facilitate misappropriation and the contractor may eventually start competing with the client. We design an incentive compatible contract that can protect company IP. A two-pronged strategy is proposed: Companies should share less know-how and give high incentive payments to deter IP misappropriation. Strategies like product differentiation may be highly useful to deter piracy.Intellectual Property Protection, Outsourcing, Product Differentiation, R&D, Agribusiness, Industrial Organization, Risk and Uncertainty, L14, L21, L23, L66, 031, 032, 034,

PERSEPSI AUDITOR EKSTERNAL TERHADAP METODE PENDETEKSIAN PENYALAHGUNAAN ASET

This study aims to observe the perception of external auditor that red flags as an effective tool for detecting assets misappropriation. The study also resulted the red flags rank that are believed to be important in the detection of assets misappropriation by the external auditors. Red flags used in this study were divided based on the assets misappropriation scheme, namely skimming scheme, cash larceny, billing scheme, cheque tampering, payroll scheme, expense reimbursement scheme and register disbursement scheme. This study uses primary data obtained by distributing questionnaires research to the external auditors. The external auditors of government, namely Badan Pemeriksa Keuangan Republik Indonesia auditors, are the sample in this study. Selection of the samples in this study using purposive sampling method. Data analysis techniques used in this study using descriptive statistics and test data quality. The results showed that the external auditors have the same perception that the red flags can be used as an effective indicator to detect assets misappropriation. In each assets misappropriation scheme, auditors have the same perception This research also resulted the most important red flag on each asset misappropriation scheme. These results indicate that the external auditor did not perceive red flag of asset misappropriation equally important

Statutory Findings and Insider Trading Regulation

Insider trading has presented some of the most unsettled and contentious issues of corporate law. These issues have been particularly difficult because often it has not even been clear whether the law forbids those who possess material nonpublic information to trade securities. Even as commentators have debated whether insider trading ought to be forbidden, the courts have disagreed on the more basic question of when and whether such trading is, in fact, forbidden. The law governing insider trading has been unclear because the scope of the SEC\u27s authority to regulate insider trading has been unclear. For a while, courts uniformly held that section 10(b) of the Securities Exchange Act (the Exchange Act ) authorizes the SEC to forbid trading by those in possession of misappropriated material nonpublic information, and that section 14(e) of the Exchange Act authorizes the Commission to forbid trading on the basis of any material nonpublic information about tender offers. However, two circuit courts of appeal subsequently rejected this precedent and held that the Commission could not forbid trading on the basis of misappropriated information or prohibit informed trading in the context of tender offers. Earlier this year, in United States v. O\u27Hagan, the Supreme Court held that (1) a person who trades securities for personal profit using confidential information misappropriated in breach of a fiduciary duty to the source of the information violates section 10(b) and rule 10b-57 and (2) at least insofar as the question had been presented to the Court, the SEC did not exceed its rulemaking authority under section 14(e) when it adopted rule 14e-3,8 which establishes a sort of parity-of-information regime for trading in connection with tender offers. Although the Court\u27s opinion in O\u27Hagan strongly endorsed the SEC\u27s regulation of insider trading, it left several important questions unanswered. For example, it is not entirely clear what sort of confidential relationship creates a duty of loyalty protected by section 10(b). Defendants presumably will argue that the breach of a noncommercial confidential relationship, such as that between a therapist and patient or between family members, does not suffice to establish securities fraud. In addition, the Court explicitly refrained from deciding whether rule 14e-3 is valid insofar as it prohibits trading in advance of a tender offer. A final question is whether the Court\u27s holding was correct. Two courts of appeal had construed section 10(b) and rule 14e-3 much more narrowly, as had numerous academic commentators. Moreover, three justices dissented from parts of the majority\u27s opinion in O\u27Hagan, and Justice Thomas, joined by the Chief Justice, strenuously argued that neither the misappropriation theory nor rule 14e-3 was consistent with the Exchange Act. This Article is about a provision of the Insider Trading and Securities Fraud Enforcement Act of 1988 ( the 1988 Act ) that directly addressed the validity of rule 14e-3 and the misappropriation doctrine, and the parameters of the latter. In the 1988 Act, Congress declared its finding that the rules and regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934... governing trading while in possession of material, nonpublic information are, as required by such Act, necessary and appropriate in the public interest and for the protection of investors. The statute further provided that the SEC had enforced such rules and regulations vigorously, effectively, and fairly. Inasmuch as the Exchange Act authorizes the SEC to promulgate necessary and appropriate rules and the 1988 Act says that the SEC\u27s insider trading rules are necessary and appropriate, on first reading these findings seem to settle the matter and establish that the SEC\u27s insider trading initiatives are within its statutory authority. Surprisingly, however, they have not figured at all in the debate over the validity of the SEC rules. Thus, one purpose of this Article is simply to highlight their existence

“Fine Distinctions” in the Contemporary Law of Insider Trading

William Cary’s opinion for the SEC in In re Cady, Roberts & Co. built the foundation on which the modern law of insider trading rests. This paper—a contribution to Columbia Law School’s recent celebration of Cary’s Cady Roberts opinion, explores some of these—particularly the emergence of a doctrine of “reckless” insider trading. Historically, the crucial question is this: how or why did the insider trading prohibition survive the retrenchment that happened to so many other elements of Rule 10b-5? It argues that the Supreme Court embraced the continuing existence of the “abstain or disclose” rule, and tolerated constructive fraud notwithstanding its new-found commitment to federalism—which I call the (fictional) “Cary-Powell compromise”—because it accepted the central premise on which the expressive function of insider trading regulation is based: manifestations of greed and lack of self-restraint among the privileged, especially fiduciaries or those closely related to fiduciaries, threaten to undermine the official identity of the public markets as open and fair. But enough time may have passed that we may have lost sight of the compromise associated with this fiction and started acting as if insider trading really is the worst kind of deceit. The result is pressure on doctrine to expand, using anything plausible in the 10b-5 toolkit. The aim is to tie this concern more clearly to the uneasy deceptiveness of insider trading, first using somewhat familiar examples such as the debate over whether possession or use is required for liability and the supposed overreach of Rule 10b5-2. Each of these settings brings us back to the centrality of intent, reminding us that the Cary-Powell compromise has in mind a form of purposefulness that is closely tied to greed and opportunism, making insider trading a sui generis form of securities fraud. That takes us to the most jarring recent development in insider trading law, the emergence (particularly in SEC v. Obus) of recklessness as an alternative basis for liability

The Theological Misappropriation of Christianity as a Civilizing Force

The theological misappropriation of Christianity as a civilizing force occurs when individuals convert to Christianity due to deception that ignores the faith-based aspect of Christianity. The history of Western education in India illustrates the hidden curriculum that Christian missionaries employed to disrupt the Indian educational system. This unnerving pedagogy points to the need for a postcolonial theoretical framework that relates the inescapable hybridity of religion and culture where Orientalism has the potential to occur. To press the ongoing urgency of this discussion, I convey how the history of British India connects to my lived-reality as an American Hindu. Overall, I point to hybridity as a lived paradox of ambiguous conflict that embraces interfaith relations. I offer implications for Christian missionaries today to foster authentic interfaith connections without engaging in colonizing ideologies

The Future of Database Protection in U.S. Copyright Law

In the recent British Horseracing Board case, the English High Court signaled a return to the sweat of the brow standard of copyright protection. Although recent attempts have been made in the United States to protect databases under this standard, this iBrief argues that the information economy is wise to continuing protecting this data through trade secret, State misappropriation and contract law until legislation is passed

The Rise of the News Aggregator: Legal Implications and Best Practices

During the past decade, the Internet has become an important news source for the majority of Americans. According to a study conducted by the Pew Internet and American Life Project, as of January 2010, nearly 61% of Americans got at least some of their news online in a typical day. This increased reliance on the Internet as a source of news has coincided with declining profits in the traditional media and the shuttering of newsrooms in communities across the country. Some commentators look at this confluence of events and assert that, in this case, correlation equals causation -- the Internet is harming the news business.One explanation for the decline of the traditional media that some, including News Corporation owner Rupert Murdoch and Associated Press Chairman Dean Singleton, have seized upon is the rise of the news aggregator. According to this theory, news aggregators from Google News to The Huffington Post are free-riding, reselling and profiting from the factual information gathered by traditional media organizations at great cost. Murdoch has gone so far as to call Google's aggregation and display of newspaper headlines and ledes "theft." As the traditional media are quick to point out, the legality of a business model built around the monetization of third-party content isn't merely an academic question -- it's big business. Revenues generated from online advertising totaled $23.4 billion in 2008 alone.But for all of the heated rhetoric blaming news aggregators for the decline of journalism, many are still left asking the question: are news aggregators violating current law?This white paper attempts to answer that question by examining the hot news misappropriation and copyright infringement claims that are often asserted against aggregators, and to provide news aggregators with some "best practices" for making use of third-party content