As Insider Trading Enforcement Surges, the Scope of Fiduciary Duties Comes Into Focus

High-profile charges of insider trading are dominating the headlines at an unprecedented pace. As federal prosecutors face pressure from Congress to take action in the aftermath of the financial crisis, insider trading has moved to the forefront of their enforcement priorities. This is not surprising. Insider trading cases—which typically involve a relatively small number of defendants, witnesses, and key pieces of evidence—are often simpler to investigate and prosecute than allegations of systemic fraud at large institutions. Moreover, they offer prosecutors the benefit of placing an individual at the center of the trial, rather than a faceless corporation.