Federalism and Insider Trading

Supreme Court Economic Review, Vol. 6, Pp. 123, 1998

Posted: 17 May 1999  

Larry E. Ribstein

University of Illinois College of Law (deceased); PERC - Property and Environment Research Center

Abstract

In United States v. O'Hagan, the Supreme Court held that a lawyer's misappropriation of client information was fraud connected with his subsequent securities transactions and therefore actionable under section 10(b) of the Securities Exchange Act of 1934. This article argues that the decision makes sense only if federal law should protect property rights in information. State law, however, offers better-developed legal rules regarding property rights. Because of state law's greater potential to benefit from jurisdictional competition and legal evolution, state courts and legislators are more likely than federal lawmakers to devise efficient legal rules for protecting private information.

Suggested Citation

Ribstein, Larry E., Federalism and Insider Trading. Supreme Court Economic Review, Vol. 6, Pp. 123, 1998. Available at SSRN: https://ssrn.com/abstract=149615

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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