This Comment endorses the legislative adoption of an initial rebuttable presumption in favor of the complainant in insider trading cases. This presumption would create a strong inference of "actual use"
upon proof that the defendant was in possession of material and non- public information at the time he consummated a securities transaction.
Moreover, the inference would establish a prima facie case of insider trading sufficient to withstand summary judgment. This Comment argues that such a presumption is appropriate as it is consistent with the plain language of section 10(b) of the Securities Exchange Act of 19345
and SEC Rule lOb-5. 6 Further, it has the effect of easing the near- impossible burden, traditionally assigned to the complainant, of proving
the defendant's state of mind. This Comment will show that although such a presumption has only been applied in a limited number of insider trading cases, it provides a fair alternative in both criminal and civil contexts.
Should a Possession or Use Standard Be Employed to Prove Insider Trading?,
San Diego L. Rev.
Available at: https://digital.sandiego.edu/sdlr/vol36/iss4/6