9th Circuit Reinstates Insider Trading Case Against Lawyer
A federal appeals court has reinstated a Securities and Exchange Commission case against a lawyer accused of trading in stock based on information he learned while sitting on a corporate board.
J. Thomas Talbot is accused of profiting through trading in shares of LendingTree Inc. before it was acquired by USA Interactive Inc., the Los Angeles Times reports. Talbot sat on the board of Fidelity National, a title insurance company, which owned 10 percent of Lending Tree before the purchase by USA Interactive.
Legal Pad reports that Talbot is a lawyer.
A lower court had thrown out the case against Talbot, saying he owed no duty to Lending Tree as a Fidelity board member. The San Francisco-based 9th U.S. Circuit Court of Appeals disagreed in a June 30 opinion (PDF). The appeals court said Talbot “owed a duty arising from a relationship of trust and confidence to Fidelity, the source of the information on which he traded.” The case now returns to the district court for a ruling on the materiality of the information.
