The virtue of this book — its foundation of White House sources who give the author insiders' material like a transcript of Mr. Obama's last telephone call with the Egyptian president, Hosni Mubarak — is also its weakness.
"What people hunger for is insider, salacious material," Mr. Leiby said.
Shortly before buying some Marvel securities, Mr. Scammell typed "insider trading," and "material, non-public information," into online searches, according to the complaint.
The S.E.C. also scrutinized Mr. Scammell's Internet search history, which included suspicious entries like "insider trading" and "material, nonpublic information," according to the S.E.C.'s complaint.
Additionally, APTC asserted its belief that the defendants were current and/or former employees who breached their fiduciary duties and contractual obligations by publishing "confidential material insider information" about APTC on the internet.
In other words, Mr. Rajaratnam, like many who subscribe to the mosaic theory, contend that none of the individual bits of scuttlebutt they pick up constitute material insider information; the edge they get, they say, comes from putting it all together.
There are many legitimate circumstances when an insider might disclose material nonpublic information: to an underwriter, accountant, lawyer, or consultant working for the corporation.
For the plan to hold up, the executive can't possess material insider information at the time the plan is drawn up, and should write and sign it well before the first trade is executed.
We, and the courts have consistently held that insiders must disclose material facts which are known to them by virtue of their position but which are not known to persons with whom they deal and which, if known, would affect their investment judgment". Id., at 911.
If an issuer publicly affirms that it does not allow its insiders to trade on material nonpublic information, then issuer-proscribed insider trading also treats other traders in that firm's shares as mere means because they have presumably priced its shares based on the expectation that such trading is not permitted.
