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The Iconic Insider Trading Cases

32 Pages Posted: 26 Feb 2008  

Stephen M. Bainbridge

University of California, Los Angeles (UCLA) - School of Law


This essay traces the evolution of insider trading jurisprudence, focusing on the three iconic Supreme Court decisions: Chiarella, Dirks, and O'Hagan. The essay argues that all three cases were seriously flawed because each failed to cohere as to either policy or doctrine. Just as a child might break his toy by attempting to force a square peg into a round hole, the Supreme Court made a hash of insider trading law (and Rule 10b-5 generally) by attempting to force insider trading into a paradigm - securities fraud - that does not fit.

Keywords: insider trading

JEL Classification: K22

Suggested Citation

Bainbridge, Stephen M., The Iconic Insider Trading Cases. UCLA School of Law, Law-Econ Research Paper No. 08-05. Available at SSRN: or

Stephen Mark Bainbridge (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

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