The Insider Trading Sanctions Act of 1984 and Its Effect on Existing Law

The legislative history of the Act shows that its principal drafters regarded those who trade on material confidential information as "thieves," deserving substantial penalties. The adoption of the Act is an expression that the existing laws should be used aggressively to curb the misuse of information. Unfortunately, such a result-oriented direction fits uncomfortably within the confining conceptual structure for rule 10b-5 built in recent years by the Supreme Court. Lower courts therefore must flesh out the law of insider trading based on inconsistent mandates, which will make the future path of the law both unpredictable and interesting.