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Abstract

The degree of insider trading has intensified in recent years. This intensification is partially due to the current law's failure to provide a clear standard for imposing liability. Rule 10b-5, formulated by the Securities and Exchange Commission (SEC) to implement section 10(b) of the Securities Exchange Act of 1934, does not contain a clear definition of insider trading. The courts have struggled to define the scope of 10b-5; the leading case law demonstrates the difficulty courts have had determining what constitutes insider trading.

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