JUSTICES TO RULE WHO IS INSIDER : SEC'S BROAD VIEW DEFENDED.Byline: John Aloysius Farrell The Boston Globe In a case that could have a huge impact on Wall Street, the Clinton administration Noun 1. Clinton administration - the executive under President Clinton executive - persons who administer the law asked the Supreme Court on Wednesday to rescue a key weapon in the war against insider trading. Deputy Solicitor General An officer of the U.S. Justice Department who represents the federal government in cases before the U.S. Supreme Court. The solicitor general is charged with representing the Executive Branch of the U.S. government in cases before the U.S. Supreme Court. Michael Dreeben asked the court to uphold the Securities and Exchange Commission's broad definition of ``insider,'' so that lawyers, brokers and other players in stock deals can't use ``cunning ... deceptive devices'' to reap illegal profits. ``Investors rely on the fact that the markets are essentially honest,'' Dreeben said. At stake is the 1994 conviction of James O'Hagan, a Minnesota lawyer who made $4.3 million in profits trading Pillsbury Co. stock after hearing that his law firm was helping a British company put together a secret takeover of Pillsbury. Prosecutors said that O'Hagan, who had been stealing from clients and needed money quickly to cover his theft, put a mortgage on his house and purchased thousands of shares and options on Pillsbury stock. The stock rose from $39 a share to $60 a share once the tender offer was announced. O'Hagan was found guilty in federal district court of deceptively de·cep·tive·ly adv. In a deceptive or deceiving manner; so as to deceive. Usage Note: When deceptively is used to modify an adjective, the meaning is often unclear. using inside information for his own gain on 57 counts of securities fraud, mail fraud and fraudulent trading In insolvency law, fraudulent trading refers to a company which has carried on business with intent to defraud creditors.[1] Where during the course of a winding-up it appears to the liquidator that fraudulent trading has occurred, the liquidator may apply to the court in connection with a takeover. But a federal appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. reversed the conviction in 1996, deciding that the SEC overreached its statutory authority when drafting insider trading rules, and that federal prosecutors stretched the rules when prosecuting O'Hagan. Dreeben argued that O'Hagan was not a classic ``insider'' - in that he did not work for either one of the two companies involved in the takeover - but was covered by the SEC's interpretation of insider trading, known as the misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any theory. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the SEC, anyone who deceptively misappropriates inside information to make money from trading securities is liable for prosecution. |
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