The Gift of Inside Information

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The New York Times

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Christmas is the time of giving, and an appeals court’s most recent effort to define the parameters of insider trading suggests a potentially new kind of stocking stuffer for this holiday season — the gift of inside information.

Staking out a much narrower view than previous courts, a three-judge panel of the United States Court of Appeals for the Second Circuit held that unless the government could prove that the tipper expected some valuable benefit in exchange for the tip, there would be no violation of federal insider trading proscriptions. Giving away information with no expectation of anything in return is apparently now permissible.