The New York Times has an update on the state of insider trading law. A professor at Wayne State University Law School, Peter Henning, writes:
Figuring out exactly what is required to prove a violation reflects the fact that insider trading law is a product of judicial decisions that are not always clear or consistent. Judges sometimes throw in a general statement about the law that is at best peripheral to the issues in a case but can become the basis for a controlling precedent. The courts are finally confronting the issue of what must be shown for a tipping case. So we are seeing the law develop, albeit in fits and starts.
Looking at it from the perspective of "exactly what is required to prove a violation" takes the point of view of the prosecutor. What about the point of view of the individual who works in finance trying to make judgments and gather information about stocks, and who risks having to pay huge legal fees, get arrested and handcuffed in front of his family members, be thrown into prison, and have his picture in the newspaper as an accused felon on the basis of this same body of caselaw that even the Times concedes is unclear, inconsistent, and under development?