"Blaszczak and the Contract-Based Misappropriation Theory of Insider Trading" published by NYU Compliance & Enforcement Blog

Print PDF
February 18, 2020

The Second Circuit’s recent decision in United States v. Blaszczak has been read as heralding an expansion of insider trading liability by rejecting the “personal benefit” requirement for insider trading prosecutions under the wire fraud and securities fraud statutes in Title 18 of the U.S. Code (“Title 18”).

While this holding may encourage more insider trading prosecutions under Title 18, Blaszczak also contains dicta that provides support for questioning, and perhaps eliminating, one of the more controversial theories of insider trading—the contract-based misappropriation theory.  In the article below, RK&O associate Jakob Sebrow explains this overlooked aspect of the Blaszczak case and what it might mean for the future of insider trading law.

Blaszczak and the Contract-Based Misappropriation Theory of Insider Trading - NYU Compliance & Enforcement Blog