Securities Regulations and Responsibilities of Auditors, Consultants and Securities

Advanced Business Law HW 12
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Advanced Business Law HW 12
Chapter 45 Case 45-40 Case45-41 Problem 1, 8
JUDGMENT
In the case United States v. Newman, the defendant is not guilty of the crime of accepting insider tips used in making a profit in the security exchange market.
Legal Principle: The source of information has to be an insider, a transitory insider, or a misappropriator. They had to be acting for their own benefit. The tippee must have purchased or sold stocks after receiving substantial, confidential information from the tipster. When they made the transaction, they must have known they were dealing with nonpublic information and acted with malice.
Issue: Is there evidence that suggests Newman was aware of the tip and acted knowingly to exploit the security market?
Holding: There was no evidence suggesting that the tippers benefited personally from giving the tips to Newman.
Reasoning:
A General Analysis: if the insider releases confidential information and the recipient is not aware of any personal benefits that the insider receives, the tipper is not liable for the crime.
B Applied Analysis: Here, ...