Fox News Agrees to Resolve Discrimination Case

The #MeToo movement has created a stir in national media outlets including cable news network Fox News. Allegations of misconduct toppled Fox News heavyweight and political commentator Bill O’Reilly. Many Fox News employees have spoken out against what they say are allegations of discrimination, a sexually-charged workforce and gender discrimination.

Diana Falzone was one Fox News journalist who said that the organization took it too far. She filed a lawsuit against her former employer. Fox News recently agreed to settle the claim. Falzone was a host of the Fox411.

Falzone accused the news network of removing her from on-air assignments because of gender and disability discrimination. She said that they took her off the air because she wrote an article about having endometriosis. Falzone talked about how she believed her medical condition would make her infertile.

She said that Fox News required all of their on-air women to be physically perfect. She said a woman with a medical condition didn’t fit Fox’s image and didn’t fit with the sexual objectification of their female, on-air talent. Falzone said that Fox News leadership took her off the air for three days after she published the article. She said management told her that she should look for another job and that she was banned from being on air.

Falzone said that she tried to handle the matter internally. She said that she filed a complaint of discrimination with the company. Falzone said that nothing was done. Falzone said that leadership at the news network is dominated by men. She said that discussing her endometriosis made her less sexually desirable in the eyes of the male leadership at the network.

Fox News denied the allegations against them. They said their business complies with all laws including anti-discrimination laws. They say that they make work assignments based on who deserves them. Retaliation and discrimination are prohibited behaviors they say.

However, this most recent claim isn’t the only one that Fox News has had to defend against in recent years. Even Fox News network executive Roger Ailes was sent packing after claims of sexual harassment. Gretchen Carlson was the first to accuse Ailes of wrongdoing. Her complaint led to Ailes’ firing after approximately 20 years of employment at Fox News. Bill O’Reilly also didn’t withstand allegations of harassment even though he hosted a very popular show during the 8 p.m. hour. Co-President Bill Shine also handed in his resignation in 2017.

 

 

New Law May Increase Your Car Insurance

If you live in Nevada, then you may be paying more for your car insurance in July. All drivers will be required by law to have $25,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident and $20,000 in property damage coverage. The new law will not go into effect until July. However, insurance companies are already making changes in order to ensure that consumers meet the limits.

Las Vegas has one of the highest car insurance rates in the country. Car insurance rates have increased by 31 percent since 2011. This is 20 percent higher than the national average. The average annual premium in Las Vegas is $2,322. The average premium in the United States is $1,422. The average insurance rate in Nevada is $1,802.

According to lasvegas.cbslocal.com, there are several reasons that car insurance rates are increasing. The insurance industry is just like any other business. The cost of owning a business increases as time goes own. That is why insurance companies have to raise the cost of their services.

More people are also getting into car accidents than they did in the past. Fatal car accidents increased by 6 percent from 2015 to 2016. This increase in car accidents has led to an increase in claims.

Twenty-two percent of households in America filed a claim in 2017. Only 20 percent of households filed a claim in 2014. Experts are predicting that 22.5 percent of people will file a claim by the year 2022.

Distracted driving is one of the things that has lead to the increase in accidents. Severe, unpredictable weather is another thing that has lead to an increase in accidents. The number of severe storms in the United States has increased over the past few years. The increase in car accidents has put a strain on car insurance companies.

Minimum $84,000 a Year Coffee Boys

A lawsuit filed in New York’s Manhattan Supreme Court has alleged that union coffee boys at the gigantic Hudson Yards development project earned between $42 and $70 per hour to deliver coffee to construction workers at the job site. The project might be as much as $100 million over budget, and the developer blames much of that overrun on the union umbrella group, Building and Construction Trades Council of Greater New York (BCTC).

One of the coffee boys is the brother of a union official. He is alleged to have been paid for 155 hours of work in the month of February of 2015, while 45 of those hours were categorized as overtime at a time and a half rate of $69.87 per hour including benefits. The lawsuit claims that the coffee boys charge construction workers for coffee and food which makes them vendors rather than construction workers.

Other allegedly improper practices included timesheet fraud. It was reported by the New York Post that one worker claimed to have earned more than $600,000 in wages and benefits by claiming to have worked 12 hours a day, seven days a week for a year. The lawsuit claims that other workers ordinarily inflate their hours by 10 to 20 percent.

Gary LaBarbera is the president of the BCTC, and documents filed with the court accuse him of “condoning if not actively participating in, numerous corrupt practices at the construction project.” Those practices allegedly violate a labor agreement that involves 35 different unions that work on the project. The BCTC and LaBarbera are claimed to have tortuously interfered with the project developer’s economic advantage by encouraging certain unions to not even work at the site.

The BCTC has yet to comment on the developer’s lawsuit. It claims that it has not yet seen it. Its spokesperson speculated that the lawsuit is in retaliation against a movement in New York City that is against open shops and development without union involvement.

 

EPA Reaches Settlement With Amazon.com on Illegal Pesticide Distribution

Marking a victory in the efforts to safeguard online consumers from the hazards of toxic pesticide compounds illegally distributed by overseas merchants, the U.S. Environmental Protection Agency reached a settlement agreement with eCommerce giant Amazon.com earlier this week.

Initially released details of the Consent Agreement and Final Order allowed Amazon to avoid stipulating to any admission or denial of wrongdoing in connection with the nearly 4000 violations of Section 3 of the Federal Insecticide, Fungicide and Rodenticide Act that the firm was accused of.

The allegations resulted from unregistered pest control products that were sold and distributed through Amazon.com’s online marketplace.

As part of their agreement with the EPA, Amazon was ordered to pay $1.2 million in penalty assessments and to implement a mandatory compliance program that includes an online education course that all sellers engaged in pesticide products will be required to pass before being allowed to sell those products on the eCommerce site.

The course’s downloadable education materials will be available in Chinese, English and Spanish.

Spokesperson for the EPA, enforcement officer Ed Kowalski stated that Amazon.com was directly engaging in commerce transactions, storing and warehousing and preparing shipments of the illegal substances.

Following the enforcement action by the EPA, Amazon removed all the products from its website and banned international sellers from distributing the pesticides through its marketplace. The company also stated that it had increased its monitoring efforts.

Customers who purchased the chemicals were asked to dispose of the products by Amazon, who also agreed to reimburse the buyers for the amounts of those purchases.

To date Amazon has agreed only that third party sellers sold the products through its marketplace.

However, the EPA’s complaint lists several unregistered pest control compounds that Amazon distributed and held for distribution, shipped and held for shipment between 2013 and 2016 including “Miraculous Insecticide Chalk,” “R.B.T.Z. Safe Highly Effective Roach Killer Bait Powder Indoor” and “Refill for ARS Electric Mosquito Killer Convenient, Clean & Smokeless.”

In their enforcement action documentation the EPA noted that Amazon.com had engaged in these practices on multiple occasions.

During July, 2017, in a related announcement, the EPA stated that it would be increasing its focus on hazardous chemical waste sites as part of the administration’s high priority monitoring and management of citizens’ exposure to toxic substances.

Legal-related news article for our website

NERA, a global consulting firm of economic experts who study, report, strategize, and provide recommendations on economic and financial issues, has been analyzing trends in securities class action lawsuits for almost three decades. The New York-based firm issued its 25th annual report on securities class action litigation, where they found a decrease in settlement money amongst higher levels of lawsuits.

NERA’s “Recent Trends in Securities Class Action Litigation: 2017 Full-Year Review” found that the settlement value of U.S. class action lawsuits making accusations of fraud and other securities law violations has tremendously declined. On the other hand, the number of the lawsuits being filed has skyrocketed to over one per day in the U.S.

Previous 2016 data showed 300 shareholder lawsuits involving accusations against a company for concealing negative news or making misleading or false statements. This number rose 44% in 2017, which is the highest it’s been since the 1995 Private Securities Litigation Reform Act took affect to curb frivolous lawsuits. Almost 200 of the lawsuits were in regard to objectionable mergers, which was double the number from last year.

The number of pending federal cases in 2017 was up 41% from 2011 and 12% from 2016. However, case resolution was also record-breaking, with a 40% dismissal rate and 30% settlement rate.

Settlements not related to merger cases rose from 113 the year before to 148 this year. However, the average settlement was under $25 million a piece. Last year the number of dismissals was 146. This year it’s a record 205.

Brian Lutz, of Gibson, Dunn & Crutcher, told Reuters that the increase may be due to what he calls “smaller cases” that are lacking in quality. Many of these lawsuits lack sufficient evidence and are either settled for pennies on the dollar or dismissed entirely.

There were 195 traditional securities class actions in 2016, 44 of which were companies outside the U.S. This year that number was 216, with 55 being non-U.S. companies. NERA points out that these lawsuits often followed regulatory probes or weak financial showings.

Attorney fees and expenses for plaintiffs in such lawsuits dropped almost 70% to $467 million, which was a number not seen so low since 2004.

The largest settlement ever remains the 2006 Enron Corp collapse settlement of $7.2 billion. The largest settlement last year was $210 million over Salix Pharmaceuticals misrepresenting inventory levels. NERA noted that 2017 was the first in almost twenty years that didn’t have a settlement of $250 million or more.

Starbucks Wins Suit About Latte Sizes

A judge has ordered up a dismissal of a lawsuit against coffee giant Starbucks. The lawsuit alleged that Starbucks didn’t fill its lattes full to the brim. In addition, the lawsuit alleged that the chronic cheating on latte sizes was an intentional way to save on costs because it required less milk.

The plaintiffs brought the case as a class action. That means they asked to represent everyone in the United States that had the same problem. If the court had heard the case, it would have resolved the issue for everyone who made a latte purchase unless buyers specifically chose to opt out. While that could have been a grande problem for Starbucks, the court said that there wasn’t enough merit to the case to even entertain it.

The named Plaintiffs are Benjamin Robles, Siera Strumlauf and Brittany Crittenden. They spearheaded the effort on behalf of latte lovers across the county. They said that Starbucks filled the drinks to about a quarter inch to the top of the cup.

Plaintiffs contend the company left the rest of the cup filled with nothing but milk foam and hot air. They say it wasn’t fair to say that the milk foam counts as being part of the latte. They say Starbucks should have measured their drinks by volume and not based on size. The plaintiffs decided the frothy failure deserved legal action, and they filed a claim for compensation.

The judge went to U.S. District Court Judge Yvonne Gonzalez Rogers. She said that the case didn’t have merit. The crux of the dismissal rested on the question of whether milk foam is a necessary part of a latte. The plaintiffs admitted that some milk froth is needed to make a latte. In other words, it’s impossible to make the drinks without the froth, but the plaintiff still said that too much froth cheated them out of a fair latte for what Starbucks offers for sale.

The judge said that there’s just no way a consumer could have reasonably assumed that there wouldn’t be at least some froth in the drinks. She said that it was reasonable for Starbucks to include the milk foam in their latte sizes. The judge was also impressed by the evidence Starbucks presented that their cup sizes are larger than what they advertise. They say that’s to compensate for froth. Starbucks says that they’re happy with the court’s decision.

California Makes Big Changes to Employment Laws

California isn’t just making big changes to its marijuana laws in the New Year. There are big changes to employment laws, too. These new laws aim to protect fairness in the hiring process and aim to prevent sexual harassment.

Limitations on Questions About Criminal History

The new employment laws prohibit hiring coordinators from asking questions about an applicant’s criminal history. Before, it was common to ask applicants to check the box if they’ve been convicted of a crime. Many times, that meant an automatic rejection of their application for employment without any follow-up questions.

Now, it’s illegal for a potential employer to ask job applicants if they’ve been convicted of a crime. It’s only after the employer has already made a conditional offer for the person’s employment that they can conduct a background check and ask the question. They’re allowed to ask, but only after they’ve conditionally offered the applicant the job.

Supporters of the bill say that it’s fair to applicants who have changed their lives after a brush with the law. They say that employers should evaluate applicants based on their current skills and character rather than on what may have happened in the distant past. They say that a person’s criminal history shouldn’t be a non-negotiable when it comes to employment decisions. They say that an applicant should have the opportunity to explain the circumstances of any criminal convictions.

However, opponents say that a criminal conviction is evidence of character. They say that for jobs where there’s money involved, finding out if an applicant has a history of theft or embezzlement is a basic question. They say the measure could hurt small businesses who are victimized by their employees.

Salary history

Potential employers can’t ask about an applicant’s salary history, either. Lawmakers don’t want employers basing pay decisions on a person’s past. They say that it’s a measure of equality and helping talented applicants get ahead. The applicant can volunteer the information, but the employer can’t directly ask for it.

Mandatory harassment training

In the wake of the #metoo movement, California’s new employment laws also aim to crack down on harassment in the workplace. Training for identifying, preventing and responding to harassment is now mandatory for all supervisors in California. When a supervisor stays on the job for more than two years, they must repeat the training. Some say the law doesn’t go far enough, but supporters say that it’s a start to creating safer workplaces in the state.

Second Circuit Court of Appeals Keeps Suit Against Alibaba Alive

A federal lawsuit against online retailing giant Alibaba filed by its shareholders was given new life last week in the Second Circuit Court of Appeals. The complaint had previously been dismissed in 2016 by Judge Colleen McMahon, but the suit has now been remanded by the appeals court and will proceed.

According to documents in the case, Alibaba shareholders argued that the Chinese e-commerce powerhouse had been aware of the many counterfeit luxury goods being sold on its site. It was further alleged that the company had also engaged in fraud against shareholders by failing to disclose a meeting between its officials and China’s State Administration for Industry & Commerce. During that meeting, the agency had reportedly warned Alibaba of fines that would be imposed if the retailer continued to permit counterfeiters to engage in transactions on the website.

In the 2016 dismissal, Judge McMahon held that the lawsuit should not move forward because Alibaba did disclose the potential regulatory hazards in its IPO information. The Court of Appeals, however, supported the shareholders’ right to argue that Alibaba had in fact defrauded them.

The opinion reviving the lawsuit highlighted the relevance of shareholder allegations that the facts concealed by Alibaba were material to investors in that the retailer had been presented with a choice between abandoning lucrative business from counterfeiters and facing massive regulatory fines. Either choice, the court stated, would have impacted company revenues substantially. As such, the lower court had improperly disregarded shareholder arguments, did not construe the complaint in a light most favorable to the plaintiff and erroneously dismissed the suit.

Accusations related to Alibaba’s tolerance of counterfeit goods being sold through its website have long plagued the Chinese retail juggernaut. Company founder Jack Ma has argued that the problem lies with Chinese governmental leniency in dealing with known counterfeiters, urging more stringent legal penalties for those engaging in such activity.

 

 

Tampa Bay Rays Bring Lawsuit Against Concession Company

The Tampa Bay Rays baseball team has always used the same concession company since they were first founded as a team back in 1998. That company is called Centerplate. Recently, the Rays have made the decision to sue that company for breach of contract, and the two have severed ties. The team is bringing the suit for at least $75,000 against the company and claim they have “a long and sad history of failing to meet up to their obligations”.

The Complaints

Baseball management in Tampa Bay have said that doing business with Centerplate has brought bad publicity onto the team, and that the failure of Centerplate to do the work that they were supposed to do in a way they were supposed to do it has turned at least some fans against the team entirely. There are a whole list of accusations brought against Centerplate in the lawsuit according to calltothepen.com. A few of those accusations are as follows:

  • Employees Not Washing Their Hands
  • Black Mold
  • Live Insects

All of these things from a food and beverage company? Well, if the lawsuit is to be believed, then that is exactly the kinds of problems that the Rays have gotten fed up with from their concessions provider.

The Company’s Response

Centerplate strongly denies the claims brought forth by the Tampa Bay Rays. They said that they are “saddened and surprised” by the lawsuit. They do plan to fight the lawsuit in court. As of this moment, there is no sign from the company that they would be willing to settle with Tampa Bay in any way for what has been alleged of them.

Fan Expectations

Fans at a baseball game are generally not very picky eaters. They know the type of food that one can purchase from a concession stand. As long as the food does not make them sick and the beer is cold, most fans are happy with the chance to buy concessions. However, if the claims against Centerplate are true, then it is understandable why the Tampa Bay Rays may feel that the company is bringing a bad name upon the team.

If the fans are willing to pay the very high prices charged at most concession stands, they ought to at least be able to count on no getting sick when they place their order for some nachos and a hot dog.

Legal Secretary Receives Fee Award in Overtime Case

A former secretary for Los Angeles area law firm J.J. Little and Associates was successful in her overtime lawsuit against her former employers, ultimately securing an award of $277,000 in attorney fees in addition to $91,000 in wage claims and $30,000 in interest previously won. As reported in the ABA Journal, the fee award did, however, represent a downward departure from the $830,000 she had originally sought.

Los Angeles Judge Barbara Scheper denied Bernal’s request for a fee multiplier, stating that the facts of the case did not warrant such a grant. Scheper further asserted that a portion of the legal work cited in support of the claim for fees needed to be attributed to categories of claims for which attorney fees are unrecoverable.

The ruling on Bernal’s attorney fee request follows a May jury verdict in which it was found that the defendant law firm did not pay proper amounts of earned overtime, did not accurately account for hours worked and did not maintain detailed wage statements as required by law.

In her original complaint, Bernal alleged that at the time of her 2010 hiring, she was led to believe that she would receive weekly wages of $1,000 and would not be required to working during evening hours. The reality of her employment situation was vastly different, according to her complaint, in that during trials she was often compelled to work upwards of 20 hours per day. Bernal also asserted that her employers expected her to be responsive to telephone calls and text messages on weekends as well as after hours during the workweek. Throughout the duration of her employment, however, she did not receive overtime compensation.

Judge Scheper’s ruling included findings that J.J. Little & Associates, its managing partner James Little and a related entity called Law Office Administrators were jointly liable for the damage award and attorney fees owed to Ms. Bernal.

Matt Lauer Seeks $30 Million Payout After Firing

Sources close to NBC’s Today Show say that Matt Lauer wants a $30 million payout for the remainder of his contract. He says that under New York contract law, NBC owes him the money. The request comes less than a week after Today Show brass fired Lauer for inappropriate conduct at work. Lauer was the highest paid personality ahead of Megyn Kelly. Lauer was spotted a few days after the firing meeting with his attorney and exchanging paperwork. New York police say that despite the complaints, there are no criminal investigations involving Lauer.

Lauer’s firing ended his twenty-year run on the hit morning show. He interviewed U.S. Presidents, foreign leaders of state and other newsmakers. He traveled the world and led broadcasting for the Olympics.

It may have been Lauer’s Olympic broadcasting that was his undoing. A victim came forward to say that Lauer summoned her to his hotel room late at night while they were in Sochi to broadcast from the Olympic Winter Games. The victim says that the behavior continued after they returned to New York. NBC officials agreed that Lauer abused his position of power in order to engage in a relationship with the woman. NBC officials also said that the behavior may not have been an isolated incident.

Officials wonder what’s next for the network. The Today Show has been in a long race with ABC’s Good Morning America for top morning show ratings. While the Today Show has largely stayed on top, management ousted Ann Curry shortly after bringing her in as a host, arguably at Lauer’s request.

Lauer’s departure has brought increased attention to his on-air behavior over his tenure at the Today Show. Critics point to an interview of Anne Hathaway where Lauer made a reference to an incident where a photographer took a photo up Hathaway’s skirt. There’s also a video circulating of Lauer commenting to a coworker that he enjoyed looking down her sweater.

Insiders say that NBC officials knew about Lauer’s behavior long before his sudden firing. Although officials denied knowing about Lauer’s conduct before a victim came forward the day before his firing, sources say that Lauer’s behavior was well known among Today Show employees. They claim that officials didn’t want to address the allegations because the Today Show is a cash cow for advertising revenue. Some wonder if Lauer’s firing doesn’t have more to do with third-party media sources that were about to break the story about Lauer’s behavior.

 

A&E Makes Big Investment In Live Trial Website

There is a market for the drama of the courtroom. As it turns out, there may even be viewers interested in viewing live trials as they unfold. That was the bet that Dan Abrams was making when he created a website for this exact type of content. He made that website and grew the audience for it. Now, a big television network (A&E) is interesting in getting a piece of the action on that.

Abrams has been interested in resurrecting the concept of Court TV that existed in years past. That was part of his goal in creating the website that he did. However, he could not try to take this all on by himself. As such, the partnership with A&E is a huge step forward on his journey. He hopes that having the network take a stake in what he has created will help to bring his vision to a larger audience.

The Wall Street Journal says that neither Abrams nor A&E has made a public comment about the value of the deal. However, a source who was close to the situation says that the deal values the website at $15 million.

The website has been riding high on the success and interest in programs such as “Making a Murderer” to promote its content. It does show live trial footage from all around the country, but there are also original documentaries that one may stream on the site. Now, with the A&E deal going through, the availability of that content is probably about to skyrocket. They plan on incorporating it into the content that they already produce, and they hope to stream that content out to a bigger audience view television as well as connected devices like smartphones and tablets.

There are always trials of interest going on throughout the country at any point. Things like the OJ Simpson parole hearing, a “suicide text” trial, and others capture the attention of the broad public in general. When the trials are going on, people want to see what will happen to the heroes and villains of these stories. Real lives are literally at stake in some cases, and that is exactly what keeps so many of us interested for long periods of time.

It is great to know that this content will be available to more people via the deal with A&E. A greater variety of content available to a larger audience is always a good thing for the growth of knowledge and experiences in the general public.

Gawker May Be Worth Something Based On Potential Legal Claims Still Outstanding

The saga of Gawker as a company is something that is hard to detail quickly and easily. It is something that has literally had a documentary made about it. To keep it short, the basic gist of things is that the company now has to sell itself to pay legal bills after being sued for a huge amount of money by none other than Hulk Hogan.

Peter Thiel, a billionaire and early investor in Facebook, was one of the people behind the lawsuit. It appears as though he helped to fund the lawsuit and encourage Hogan to bring that suit. The reasons behind this move are complex, but mostly they boil down to the fact that Thiel was unhappy with the fact that Gawker had published information about his sexuality without his consent. In other words, they outed him for being gay. He was upset by this, and therefore decided to take out his revenge on the company for having done this.

Now, it turns out that the person in charge of trying to sell Gawker has taken steps to market the potential legal claims that the company may have against Thiel or others. This could help to add value to the company for anyone who might be interested in making the purchase.

The Wall Street Journal has reported that the addition of legal claims against Thiel has helped to increase the interest of various parties that may bid on the company.

Some interested groups include a Hollywood film company which may adapt the site to cover more Hollywood-related news. They may also even look into creating a film about the story of Gawker. Even though there is a documentary out about the company, this has not quenched the thirst of those interested in learning more about the story. It is just such an interesting story to some many people, and they are still wanting to know more. It seems likely that there is a market out there for creating yet another movie on this topic.

There is no clear frontrunner for who may actually end up bidding on this company. There are interested parties, but for the moment that is all that they are. There is still a lot of work to be done to determine who will ultimately end up with this company in their possession. Since August of 2016 the company has not produced anything at all. Starting over again will take some work and effort, but it can be done.

Missouri Investigates Google in Antitrust Case

The attorney general of Missouri has issued an investigative subpoena against Google, alleging that the company has violated the state’s antitrust laws.

Google is owned by Alphabet Inc. and is one of the leading technological companies in the world, most known for its search engine, as well as mobile software and online advertising.

Josh Hawley made the announcement at a press conference on Monday, November 13, 2017. Among his stated concerns about the popular tech giant are questions about the accuracy of its privacy policy, as well as claims that it has illegally copied content from its rivals and that it purposefully buries their websites in its search results.

Andrea Faville, a spokeswoman for Google, said in a statement that they have not yet received the subpoena, but that “we have strong privacy protections in place for our users and continue to operate in a highly competitive and dynamic environment.”

These accusations are similar to other claims made against Google, both within and outside of the United States.

In 2013, Google reached a $7 billion settlement with the attorneys general of 37 states because it was using its Street View feature, meant to show users a panoramic of various streets around the world, to collect wi-fi data in an authorized manner. That same year, the Federal Trade Commission also prompted the company to provide more flexible terms to patent licensees and advertisers.

In June of this year, Google was also fined $2.7 billion by the European Union, on the grounds that it was illegally promoting links to its own shopping site over those of other online companies. Google is currently appealing that decision, but Hawley said that he is concerned that they may be doing the same thing within the United States.

Yelp Inc., a rival of Google that runs a business review site, has also accused Google of making unauthorized copies of its images, despite an agreement with American antitrust officials.

Yelp, along with Microsoft Corp., has pushed for Google to face antitrust charges in the past. Attorneys general in Ohio, Mississippi and Texas have tried to pursue inquiries but had little success.

At the press conference, Hawley, a Republican, denied claims that opening this case has to do with his bid to replace Democratic Senator Claire McCaskill in next year’s election, saying that he is acting on his currently role “to get to the truth” about these issues.

THE UNCERTAINTY SURROUNDING INSIDER TRADING IN THE UNITED STATES

Insider Trading, refers to the act of trading in a company’s stock by individuals with access to non-public information that pertains to the entity. The insider breaching policy and offering non-public information to external parties is known as a tipper. The outsider benefiting from privileged information is called the tippee. However, not all inside trading activity is illegal. Insider trading activity that is documented with the Securities and Exchange Commission (SEC) in advance is permissible.
The SEC is an entity charged with regulation of stock exchange in the US— by ensuring transparency among all stakeholders. In 2000, the SEC enacted Rule 105b-1 which explained illegal insider trading activity. The rationale behind the criminalization of insider trading was that it breached the transparency of the US Stock markets— a tenet the markets were built upon. Despite being expounded by the SEC, insider trading has never formally been defined in any Statute in the US. Owing to this, a cloud of uncertainty has always engulfed stakeholders in US Stock markets.
Over the years, judicial decisions from the U.S Supreme Court and Circuit Courts have only thrown the public into further disarray, regarding what constitutes illegal insider trading. An example is the grey area cast in the 1984 landmark case of Dirks v. SEC. In its ruling, the Supreme Court interpreted a breach of Stock markets’ transparency as when “a tipper stands to benefit from disclosing non-public information to unwarranted parties personally.” Unfortunately, the Court did not clarify the scope of the term ‘personal benefit.’ For years, stakeholders in US Stock markets were bound by the decision in Dirks v. SEC where insider trading was concerned.
The public was thrown into disarray in 2014 when the Second Circuit Court issued a different interpretation of the term ‘personal benefit’ in United States v. Newman. The Court interpreted that the personal benefit doctrine was also applicable where the tipper and tippee have a close relationship and that such benefit does not necessarily have to be financial. In Salman v U.S, the Supreme Court upheld this decision.
Tumult grew in August 2017 when the personal benefit doctrine was applied to include a tippee who had invested after receiving confidential information from a doctor, in U.S v. Martoma. The doctor was neither related to the defendant, nor had he received any ‘benefit’ from sharing the information.

LINK
https://www.forbes.com/sites/insider/2017/09/06/letter-on-insider-trading-from-a-confused-wall-streeter/#75e46101119f