Insiders Can Disclose and Trade – Or Can They?

Abstract

The article addresses the rather ambiguous doctrine of “disclose or abstain” with respect to insider trading. A brief review of The Securities Exchange Act of 1934 and court cases and judicial opinions suggests that the only real option available for someone possessing insider information is to abstain from trading on that information. The alternative of disclosing this information and trading does not appear to be a viable alternative. The authors offer a specific recommendation for new regulatory guidelines for disclosure which could, indeed, make this a realistic alternative.

Citation

Ghosal, M. and Stanley, K.L. (1988), "Insiders Can Disclose and Trade – Or Can They?", American Journal of Business, Vol. 3 No. 1, pp. 27-31. https://doi.org/10.1108/19355181198800004