Dec 1, 2018 | Article, Norbert Gaillard, Securities
By Norbert Gaillard and Michael Waibel Abstract Subsequent to the 2007–2008 subprime crisis, the SEC and the US Senate discovered that it was common practice for major credit rating agencies (CRAs) to produce inflated and inaccurate structured finance ratings. A host...
Sep 1, 2018 | Article, Marc I. Steinberg, Securities, Texas Gulf Sulphur
By Marc I. Steinberg Abstract Fifty years ago, the Second Circuit decided perhaps the most important case under the U.S. securities laws – Securities and Exchange Commission v. Texas Gulf Sulphur. This decision focused on several landmark issues, including insider...
Sep 1, 2018 | Article, Securities, Stephen M. Bainbridge, Texas Gulf Sulphur
By Stephen M. Bainbridge Abstract The Texas Gulf Sulphur decision was the seminal moment in the creation of the modern federal insider trading prohibition. In the half century since it was decided, however, courts and commentators have overlooked the glaring flaw in...
Sep 1, 2018 | Article, Richard M. Buxbaum, Securities, Texas Gulf Sulphur
By Richard M. Buxbaum Abstract While the TGS duo is justly known for its foundational work on the application of Rule 10b-5 to insider trading and corporate misstatements, two other aspects of the two cases are the focus of this contribution. The first is the...
Sep 1, 2018 | Article, Securities, Texas Gulf Sulphur, Wendy G. Couture
By Wendy G. Couture Abstract This essay uses Texas Gulf Sulphur as a case study on an issue that companies continue to face today: whether, and how, to respond to market rumors. This essay analyzes the countervailing incentives that influence whether companies respond...
Sep 1, 2018 | Article, James D. Cox, Securities, Texas Gulf Sulphur
By James D. Cox Abstract Data summarized in the opening of this article document shows that inside trading is a growth industry. And, as deals get ever bigger, the growth curve becomes steeper as more the data confirms intuition that the more who know about a good...
Sep 1, 2018 | Article, Onnig H. Dombalagian, Securities, Texas Gulf Sulphur
By Onnig H. Dombalagian Abstract Texas Gulf Sulphur’s bold ultimatum—”disclose or abstain”— enjoys an enduring place of prominence in discussions of insider trading law be- cause of the intuitive simplicity with which it asserts the expectations of investors in...
Sep 1, 2018 | Article, Lisa M. Fairfax, Securities, Texas Gulf Sulphur
By Lisa M. Fairfax Abstract As the first federal court decision to hold that insider trading represented a violation of the federal securities laws, the historical importance of SEC v. Texas Gulf Sulphur Co. is clear. However, its current relevance may not be so...
Sep 1, 2018 | Article, Jill E. Fisch, Securities, Texas Gulf Sulphur
By Jill E. Fisch Abstract The Texas Gulf Sulphur decision began what has become a fifty-year project of developing U.S. insider trading regulation through judicial law-making. During the course of that project, the courts developed a complex, fraud-based approach to...
Sep 1, 2018 | Article, George N. Tepe, Merritt B. Fox, Securities, Texas Gulf Sulphur
By Merritt B. Fox and George N. Tepe Abstract The Supreme Court’s decision in Salman v. United States left unanswered an important issue concerning the reach of Rule 10b-5’s prohibitions with respect to trades based on a tip of material inside information: in cases...
