In U.S.vs.O'Hagen,the court ruled that someone who traded on the basis of inside information when he or she knew the information was confidential was guilty of misappropriation.

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The statement correctly summarizes the ruling of the U.S. Supreme Court in U.S. v. O'Hagan. The court held that trading on the basis of inside information obtained through a breach of fiduciary duty or confidential relationship, such as a lawyer or accountant using client information to trade securities, constituted misappropriation under the federal securities laws.

In USVsO'Hagen,the Court Ruled That Someone Who Traded on the Basis