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The Personal Benefit Test in Misappropriation Cases
Like many aspects of insider trading law, the personal benefit test is deceptively straightforward. In tipping cases brought under the “classical” theory of insider trading, corporate insiders who disclose material nonpublic information, and persons who receive the information and trade based on it, are liable for securities fraud only if the tipper received a personal benefit in exchange for sharing the information. But almost 30 years after the test was first articulated, questions remain: Is the benefit test a separate element of liability or an aspect of another element, like breach of duty or scienter? And what counts as a sufficient “benefit”?
Those uncertainties have contributed to a greater controversy: whether the benefit test applies in tipping cases brought under the misappropriation theory. Prosecutors and regulators argue that it does not, and some courts have agreed. But careful examination of the purpose for the test and the requirements of misappropriation liability suggests that the government's opposition is misguided.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Second Circuit Reinforces Bankruptcy Code Settlement Payment Safe Harbor
The Second Circuit affirmed the lower courts' judgment that a "transfer made … in connection with a securities contract … by a qualifying financial institution" was entitled "to the protection of ... §546 (e)'s safe harbor ...."