Research Handbook on Insider Trading
Show Less

Research Handbook on Insider Trading

Edited by Stephen M. Bainbridge

In most capital markets, insider trading is the most common violation of securities law. It is also the most well known, inspiring countless movie plots and attracting scholars with a broad range of backgrounds and interests, from pure legal doctrine to empirical analysis to complex economic theory. This volume brings together original cutting-edge research in these and other areas written by leading experts in insider trading law and economics.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 7: Regulation FD: an alternative approach to addressing information asymmetry

Jill Fisch


Although commentators have identified various reasons to regulate insider trading, one rationale is to reduce the existence of information asymmetries in the securities markets. In its litigations in Chiarella and Dirks, the government attempted to use fraud-based theories of liability to address information asymmetries. The Supreme Court limited the effectiveness of this approach by requiring a predicate breach of duty for a violation of Rule 10b-5. The Securities and Exchange Commission (SEC) responded in August 2000, by adopting Regulation Fair Disclosure. Regulation FD took an alternative approach to information asymmetry that was not grounded in theories of fraud but, instead, in issuer disclosure obligations. Specifically the Rule focused on corporate issuers and corporate officials as the sources of such asymmetries, reasoning that if selective disclosures by corporate insiders could be prevented at the source, regulators would have less need to address trading by the recipients of that information.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.