biz org class 22

chiarella
the company chiarella works for has been retained by the acquiring company, the company that is going to purchase the target company. chiarella buys shares of the target company. but he's not liable under rule 10(b) because he has no fiduciary duty to either the acquirer or the target company, but particularly no duty to the targeted company.

dirk case
can't just be that someone with more information be held liable under Rule 10(b)(5), otherwise we would be impairing analysts etc. who research companies and use their expertise to make and recommend trades that raise/lower market value. thereby we buy/sell in a market that is arguably efficient because financial analysts investigate companies and develop ideas about that company's future.

"level playing field" approach would destroy the analysts' ability to investigate companies.
we're not looking to level the playing field. there must be a fiduciary duty otherwise it will destroy incentives to give opinions.

the analysis all builds on each other in terms of insider trading.

dirks v. SEC and it all builds on information that tips, and the use of that tip information for insider trading.

wall street movie.



o'hagen case theory, involving different but applicable facts leading to liability that is different from the classic insider trading theory.