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Data summarized in the opening of this article document that inside trading is a growth industry. And, as deals get ever bigger, the growth curve becomes steeper as more the data confirms intuition that the more who know about a good thing the more who will seek to harvest its benefits. Even though insider trading appears to have thrived during the fifty years after Texas Gulf Sulphur, we gather in this symposium to celebrate the decision. But why? As developed below, the Second Circuit’s landmark decision gave way to the Supreme Court’s erection of a fiduciary framework that this article reasons is unhelpful. Little remains of Texas Gulf Sulphur. This article seeks to explain why the decision remains important. It counsels that insight to why and how to regulate insider trading lies in closely considering Texas Gulf Sulphur, whose rich facts but opaque reasoning in combination enable it to endure as a guidepost by which to locate at least two mutually supportive rationales, developed here, for regulating insider trading.

Library of Congress Subject Headings

Insider trading in securities--Law and legislation, Securities, SEC v. Texas Gulf Sulphur Co.