United States v. OHagan Essay Example | Topics and Well Written Essays - 500 words

United States v. OHagan - Essay Example His actions would directly impact the shareholders and other stakeholders in the company in a big way. In the present case, O’Hagan has used the non-public information to his advantage to make huge profits, which consequently caused serious losses to other shareholders. Although the way O’Hagan obtained this information is very nonrepresentational and abstract, his association with the law firm, and in the process of takeover makes his case strongly liable to the shareholders under the  §10(b). The  §10(b) in reality prohibits any act or accomplishment that results in fraud or deceit related to purchase or sale of any security. In the present case, O’Hagan has involved in an act which is fraudulent and deceitful from other stakeholders of the company. The excerpts from Justice Ginsberg’s decision state, â€Å"Under the â€Å"traditional† or â€Å"classical theory† of insider trading liability,  §10(b and Rule 10b-5 are violated when a corporate insider trades in the securities of his corporation on the basis of material, non-public information. The classical theory applies not only to officers, directors, and other permanent insiders of a corporation, but also to attorneys, accountants, consultants, and others who temporarily become fiduciaries of a corporation.† Even the law of misappropriation holds that misappropriating confidential information for securities trading purpose would be a breach of duty owed to the source of that information, which gives rise to a duty to disclose or abstain. O’Hagan’s case is a clear deception of conduct related to securities transactions. The  §10(b) holds that any action taken by anyone associated with the principal in any manner and/or had access to non-public information that would be used to their advantage is liable to the shareholders. O’Hagan although was not an insider, in sense, he had the information about the takeover, and his association with Dorsey