For Your Data Securities Too Telephone Substitution Committee V. Cuban Illustration Brief

Securities as well as Exchange Commission v. Cuban instance brief summary
634 F.Supp.2d 713 (2009)

CASE SYNOPSIS

Plaintiff Securities as well as Exchange Commission (SEC) sued under, inter alia, § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The SEC alleged insider trading against accused nether the misappropriation theory. Defendant moved to sack the electrical load under Fed. R. Civ. P. 12(b)(6).

CASE FACTS
The SEC alleged that, subsequently accused agreed to keep the confidentiality of material, nonpublic data concerning a planned mortal investment inward world equity (PIPE) offering past times a certainly companionship he sold his stock inward the companionship without kickoff disclosing to the companionship that he intended to merchandise on this information, thereby avoiding substantial losses when the stock cost declined subsequently the PIPE was publicly announced.

ISSUE
Whether the SEC adequately alleged that accused undertook a duty of non-use of data required to found liability nether the misappropriation theory of insider trading.

DISCUSSION

• The courtroom granted defendant's motion to dismiss. 
• The courtroom held that, because the SEC failed to allege that accused undertook a duty to refrain from trading on data almost the impending PIPE offering, as well as because the SEC could non rely on the duty imposed by 17 C.F.R. § 10b5-2(b)(1) alone, accused could non endure held liable nether the misappropriation theory of insider trading liability, fifty-fifty accepting all well-pleaded facts every bit truthful as well as viewing them inward the lite most favorable to the SEC.

CONCLUSION
Defendant's motion to sack was granted. The SEC was given permission to replead.

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