Chiarella worked at a company that printed financial documents. In one documents, he read confidential information that allowed him to buy stock and make a nice profit because of his knowledge. When sued by the SEC for insider trading, the Supreme Court found Chiarella:

Question

Quizplus · Accepted Answer

The Supreme Court found Chiarella not guilty of insider trading because he had no fiduciary duty not to use the information. The court held that Section 10(b) and Rule 10b-5 only prohibit trading on the basis of material, nonpublic information by those who have a duty to disclose or abstain from trading based on that information due to a relationship of trust and confidence with the source of the information. As a mere employee who had no duty to disclose or abstain, Chiarella did not violate the securities laws by trading on the information he learned.

Chiarella Worked at a Company That Printed Financial Documents