Equal Access to Information: The Fraud at the Heart of Texas Gulf Sulphur

15 Pages Posted: 8 Aug 2017  

Stephen M. Bainbridge

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

Date Written: August 7, 2017

Abstract

The Texas Gulf Sulphur decision was the seminal moment in the creation of the modern federal insider trading prohibition. In the half century since it was decided, however, courts and commentators have overlooked the glaring flaw in the court’s analysis.

In the key part of the opinion, in which the court laid out the equal access standard, the court grossly misrepresented the precedents on which it relied. The court cited two state law opinions that were wholly irrelevant to the problem at hand. It cited two law review articles, but those articles simply do not say what the court claimed they said. Finally, the court made a bald, unsupported statement of Congressional intent that is demonstrably false.

The insider trading prohibition thus rests on a foundation of sand.

Keywords: Insider Trading, Securities Regulation, Texas Gulf Sulphur, TGS

Suggested Citation

Bainbridge, Stephen M., Equal Access to Information: The Fraud at the Heart of Texas Gulf Sulphur (August 7, 2017). UCLA School of Law, Law-Econ Research Paper No. 17-14. Available at SSRN: https://ssrn.com/abstract=3014977

Stephen Mark Bainbridge (Contact Author)

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

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-1599 (Phone)
310-825-6023 (Fax)

HOME PAGE: http://www.professorbainbridge.com

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