San Diego Law Review


Gary Bunch

Library of Congress Authority File


Document Type



This Article critiques the Supreme Court's decision in United States v. Chiarella, and suggests that the Court should have held that Chiarella's purchases of securities on the basis of nonpublic material market information constituted fraud in violation of the Securities Exchange Act. The author argues that a rule of law should have been established that a person who possesses nonpublic material market information and engages in purchases or sales of securities on the basis of that information, without disclosing the information to the investing public, violates Section 10(b) and Rule 10b-5. The author further argues that the only exception should be for the person who is fulfilling an essential market function or who is a tender of feror. The author concludes that the United States Supreme Court erred in reversing the court of appeals.

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