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Insider Trading- when it's allowed when it isn't.


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makes it hard for prosecutors to go after unfair use of information by professional investors. Newman, after all, didn't involve relatives, buddies or cronies. It involved hedge fund managers using information that they got from their analysts, who got it from other analysts, who got it from company employees with whom they had more or less professional relationships. The prosecutors' theory in Newman was that, if you are a professional investor, and you have really good nonpublic information about a company's finances, then that alone means that you are guilty of a crime. If you have good information, and no one else has it, then trading on it is a crime, even if you have no idea where it comes from.

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