Bite-Sized Business Law

Inside Insider Trading with Stephen Fishbein

Jun 4, 2024

01:02:54

Go inside this most infamous financial crime with guest Stephen Fishbein, who has argued some of the most influential insider trading cases in modern history. Almost everyone, no matter your knowledge base, has an opinion about insider trading. And most peoples’ opinions are that it’s evil. But do you know exactly what insider trading is (not even Congress has defined it) and how you are affected by it? To help us dissect insider trading law and explain why we need to recalibrate our thinking around how we prosecute this white-collar crime, distinguished trial lawyer and partner at A&O Shearman, Stephen Fishbein, joins us. Stephen begins by explaining how his early career as a federal prosecutor serves him in the work that he does today in private law. Stephen describes the law’s ever-changing definition of insider trading, why Congress has yet to provide its own definition of insider trading, Dirks v. SEC’s establishment of the baseline, how United States v. Newman changed the law, and how the Blaszczak cases revealed a different side of insider trading. We also learn about shadow insider trading and the misappropriation theory, how political ambitions inside prosecutors’ offices have shaped insider trading law in America, what the law looks like in the rest of the world, and the dangers of not doing enough research on insider trading for you and your business. To end, we take a philosophical detour to debate whether insider trading is inherently good or bad and our guest shares his thoughts on what policymakers need to be doing more of to change the way insider trading is policed.

Key Points From This Episode:

Stephen Fishbein's professional background and how he ended up at A&O Shearman.
How his experience as a prosecutor influences the work that he does today.
Understanding the main features of insider trading under Rule 10b-5.
The basics of insider trading law as established in Dirks v. SEC.
How (and why) United States v. Newman changed the law.
Why Congress has thus far been reluctant to provide its own definition of insider trading.
The Blaszczak cases: a different type of insider trading.
The correlation between shadow insider trading and the misappropriation theory.
How political ambitions inside the U.S. Attorney's Office have shaped insider trading law.
Insider trading law in other countries.
Whether insider trading is right or wrong on a philosophical level.
What American lawmakers need to be thinking more about with regard to insider trading.