O’Melveny Worldwide

Bloomberg Law: Resolving The Personal-Benefit Anomaly In Insider-Trading Law

February 23, 2023

O’Melveny partner Michael Dreeben co-authored this article discussing the personal benefit anomaly and its application to insider-trading law. “Ultimately, because Title 18 securities fraud punishes only fraud, it therefore must incorporate the personal-benefit requirement that is indispensable to finding fraud in tipper-tippee insider-trading cases,” the authors wrote. “Harmonizing these counterpart anti-fraud statutes not only resolves the anomaly that Judge Walker identified, it also avoids chilling the free flow of information between insiders and securities analysts that Dirks sought to protect and provides a workable line for insiders, traders, and their counsel to follow. And this harmonization can immediately be achieved by courts, without waiting for Congress to act.”

Read the full article here.