Shadow trading – a new chapter in Insider Trading? Learnings from US SEC - Resolut Partners

Shadow trading – a new chapter in Insider Trading? Learnings from US SEC

Shadow trading – a new chapter in Insider Trading? Learnings from US SEC

May 14, 2024

Key Takeaways

  • In a novel case of Shadow Trading, California District Court held that MNPI about one company could count as MNPI for another company if they are economically linked
  • What is Shadow Trading? What is the concept of economically linked entities? How is international jurisprudence developing on Shadow Trading?
  • US law differs from Indian law on grounds of knowledge, materiality and intention – to that extent Indian law, arguably, maybe more equipped to deal with these situations
  • PE funds with multiple verticals or EFMs, and listco boards should consider revising UPSI/ MNPI policies to factor-in economically-linked companies
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