1 See generally N Véron “Financial reform after the crisis: An early assessment” (2012), available at: <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986922> (last accessed 21 July 2013); M Kawai and ES Prasad Financial Market Regulation and Reforms in Emerging Markets (2011, Brookings Institution Press and Asian Development Bank Institute) at 2–27; Botha, E and Makina, D “Financial regulation and supervision: Theory and practice in South Africa” (2011) 10/11International Business & Economics Research Journal 27Google Scholar; Prentice, RA “Permanently reviving the temporary insider” (2011) 36/2The Journal of Corporation Law 343Google Scholar; M Merlin “Financial supervision in Europe after the crisis” in M Balling, F Lierman, F Van den Spiegel, R Ayadi and DT Llewellyn (eds) New Paradigms in Banking, Financial Markets and Regulation? (2012, SUERF) 13, available at: <http://www.researchgate.net/profile/Donato_Masciandaro/publication/254410959_New_Paradigms_in_Banking_Financial_Markets_and_Regulation/links/00b4953c6976111804000000.pdf#page=17> (last accessed 22 June 2014).

2 See generally E Avgouleas Governance of Global Financial Markets: The Law, the Economics, and the Politics (2012, Cambridge University Press); E Wymeersch, KJ Hopt and G Ferrarini Financial Regulation and Supervision: A Post-Crisis Analysis (2012, Oxford University Press); N Moloney and  JG Hill The Regulatory Aftermath of the Global Financial Crisis (2012, Cambridge University Press) at 1–52; A Carvajal and JA Elliott “The challenge of enforcement in securities markets: Mission impossible?” (2009), available at: <http://www.imf.org/external/pubs/cat/longres.aspx?sk=23140.0> (last accessed 29 July 2013); US Treasury “Financial regulatory reform: A new foundation: Rebuilding financial regulation and supervision” (2009), available at: <http://www.treasury.gov/initiatives/Documents/FinalReport_web.pdf> (last accessed 31 July 2013).

3 This has been an important factor, for instance in comparing risk management practices and regulatory capital across different countries; see Basel Committee on Banking Supervision “Risk management practices and regulatory capital: Cross-sectoral comparison” (November 2001), available at: <http://www.bis.org/publ/joint04.pdf> (last accessed 4 August 2013).

4 Emerging economies have generally sought the examples of their more developed counterparts and these have generally imposed great influence on the outcomes of the legislation enacted. For instance, scholars argue that, as far back as 1988, the US government has been influential in persuading foreign jurisdictions to craft laws and put in place structures aimed at restricting insider dealing; see for example Houle, MJ “Survey of national legislation regulating insider trading” (1998) 9 Michigan Yearbook of International Legal Studies 209Google Scholar; see also MA Glendon, PG Carozza and CB Picker Comparative Legal Traditions: Text, Materials and Cases on Western Law (3rd ed, 2007, West); Picker, CB “International law's mixed heritage: A common / civil law jurisdiction” (2008) 41 Vanderbilt Journal of Transnational Law 1083Google Scholar.

5 See for instance K Franklin “US v UK insider trading laws: Who is the top dog?” (21 February 2013), available at: <http://ssrn.com/abstract=2308356> (last accessed 4 August 2013); SM Bainbridge “An overview of insider trading law and policy: An introduction to the Insider Trading Research Handbook 2” (4 September 2012), available at: <http://ssrn.com/abstract=2141457> (last accessed 5 August 2013); Mindful Money “A brief history of insider trading” (14 October 2011), available at: <http://www.mindfulmoney.co.uk/7850/economic-impact/a-brief-history-of-insider-trading.html> (last accessed 4  August 2013); American Experience “Timeline: A selected Wall Street chronology” (PBS IPTV), available at: <http://www.pbs.org/wgbh/americanexperience/features/timeline/crash/1/> (last accessed 4 August 2013).

6 MI Steinberg International Securities Law: A Contemporary and Comparative Analysis (1999, Kluwer Law International) at 2.

7 See generally SM Bainbridge “The law and economics of insider trading: A comprehensive primer” (February 2001), available at: <http://papers.ssrn.com/paper.taf?abstract_id=261277> (last accessed 7 August 2013); Bhattacharya, U and Daouk, H “The world price of insider trading” (2002) 57Journal of Finance 75Google Scholar; K Alexander “The law of insider dealing: A tale of two jurisdictions”, available at: <http://www.rwi.uzh.ch/lehreforschung/alphabetisch/alexander/person/publikationen/2013TheLawofInsiderDealingATaleofTwoJurisdictions.pdf> (last accessed 22 June 2015); E Avgouleas The Mechanics and Regulation of Market Abuse (2005, Oxford University Press) at 11–14; Salbu, SR “A legal and economic analysis of insider trading: Establishing an appropriate sphere of regulation” (1989) 8/2Business and Professional Ethics Journal 3CrossRefGoogle Scholar; Cox, JD “An outsider's perspective of insider trading regulation in Australia” (1990) 12/2–3The Sydney Law Review 455Google Scholar; K Alexander “Insider dealing and market abuse: The Financial Services and Markets Act 2000” (2000, ESRC Centre for Business Research, University of Cambridge working paper 222); Haft, RJ “The effect of insider trading rules on the internal efficiency of the large corporation” (1982) 80 Michigan Law Review 1051CrossRefGoogle Scholar.

8 See for example McVea, H “What's wrong with insider dealing?” (1995) 13/3Legal Studies 390CrossRefGoogle Scholar. Other arguments proffered in favour of insider trading are to the effect that it is a form of executive compensation for entrepreneurial efforts and a way of increasing a corporation's internal efficiency. See H Manne Insider Trading and the Stock Market (1966, The Free Press); and Manne, H “In defense of insider trading” (1966) 44/b Harvard Business Review 113Google Scholar. Furthermore, Manne posits that corporate information is property that is owned by the corporate organization. As such, property owners have the prerogative to deal with that property in any way they deem necessary. See R Nozick Anarchy, State and Utopia (1974, Basic Books) at 54. For a short overview of the debate on the pros and cons of insider dealing, see generally McGee, RW “Analyzing insider trading from the perspectives of utilitarian ethics and rights theory” (2009) Journal of Business Ethics 1Google Scholar.

9 The endorsement of the prohibition by the International Organisation of Securities Commissions (IOSCO) is a manifestation of the wider recognition of the adverse economic effects of insider dealing. See IOSCO “Objectives and principles of securities regulation” (2001) at 18, para 9.3. Likewise, through the implementation of the Insider Dealing and Manipulation Directive (directive 2003/6/EC of the European Parliament and Council, 28 January 2003), European Union countries have collectively condemned insider dealing and other forms of manipulative conduct in the financial markets.

10 For further discussion of the rationale for the prohibition of such conduct, see for example: Steinberg International Securities Law, above at note 6; Alexander “The law of insider dealing”, above at note 7; Avgouleas The Mechanics and Regulation of Market Abuse, above at note 7 at 11–14; Salbu “A legal and economic analysis”, above at note 7; Cox “An outsider's perspective”, above at note 7.

11 IOSCO “Objectives and principles”, above at note 9 at 18, para 9.3.

12 See generally Alexander “Insider dealing and market abuse”, above at note 7; Opiyo, E “Effects of corporate governance on insider trading: A case of listed companies on Nairobi securities exchange” (2013) 3/10Prime Journal of Business Administration and Management 1202Google Scholar; Tomasic, R “Casino capitalism? Insider trading in Australia” (1991) Australian Institute of Criminology 115Google Scholar.

13 According to sec 77, an “‘insider’ means a person who has inside information - (a) through - (i) being a director, employee or shareholder of an issuer of securities listed on a regulated market to which the inside information relates; or (ii) having access to such information by virtue of employment, office or profession; or (b) where such person knows that the direct or indirect source of the information was a person contemplated in paragraph (a)”.

14 Further, under sec 77 “‘inside information’ means specific or precise information, which has not been made public and which - (a) is obtained or learned as an insider; and (b) if it were made public, would be likely to have a material effect on the price or value of any security listed on a regulated market”.

15 See for example Humke, JJ “The misappropriation theory of insider trading: Outside the lines of section 10(b)” (1997) 3/13Marquette Law Review 819Google Scholar; Sullivan, T “We're still against fraud, aren't we? United States v O'Hagan: Trimming the oak in the wrong” (1997) 71/1St John's Law Review 197Google Scholar; Nelson, AR “Extending outsider trading liability to thieves” (2012) 80 Fordham Law Review 2157Google Scholar; Bainbridge, SM “Incorporating state law fiduciary duties into the federal insider trading prohibition” (1995) 52 Washington and Lee Law Review 1189Google Scholar; O'Connor, MA “Toward a more efficient deterrence of insider trading: The repeal of section 16(b)” (1989) 58 Fordham Law Review 309Google Scholar.

16 For a discussion of this “catchall” approach, see for example JD Cox and RW Hillman Securities Regulation (5th ed, 2010, Aspen Publishers) at 879–80; Swanson, CB “Insider trading madness: Rule 10b5–1 and the death of scienter” (2003) 52 University of Kansas Law Review 147Google Scholar; Finnell, LJ “States v Carpenter: Second circuit overextends the misappropriation theory of criminal liability under rule 10b-5 comment” (1987) 12 Delaware Journal of Corporate Law 60Google Scholar; SM Bainbridge “An overview of US insider trading law: Lessons for the EU?”, available at: <http://compliance.knowledgeplatform.com/Files/Attachments/c25a7c8d-e8be-47f4-9876-dc4aaf2d8a5aOverview%20of%20US%20Insider%20Trading%20Law.pdf> (last accessed 19 August 2013).

17 See generally Salbu, R “Regulation of insider trading in a global market place: A uniform statutory approach” (1992b) 66 Tulane Law Review 837Google Scholar; Junewicz, JJ “Insider trading act is needed, but without defining the term” (1984) National Law Journal 25Google Scholar. Early attempts at interpreting those provisions were made in In The Matter of Cady, Roberts & Co 40 SEC 907 (1961) and later expanded in SEC v Texas Gulf Sulphur Co 401F.2d 833 (2nd cir 1968).

18 Jooste, R “Critique of the insider trading provisions of the 2004 Securities Services Act” (2006) 123/3South African Law Journal 437Google Scholar at 438.

19 See Jooste ibid; see also Van Zyl, F “South African insider trading regulation and enforcement” (1994) 15/3Company Law 92Google Scholar; JRL Milton South African Criminal Law and Procedure III: Statutory Offences (2nd ed, 1988, Juta Law) at 10.

20 Krause, H “The German Securities Trading Act (1994): A ban on insider trading and an issuer's affirmative duty to disclose material non-public information” (1996) 30 International Law 555Google Scholar. This contrasts with sec 1002B(2) of the Australian Corporations Law which sets forth that information is generally available if “(a) it consists of readily observable matter; or (b) without limiting the generality of paragraph (a), both the following subparagraphs apply: (i) it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in securities of bodies corporate of a kind whose price or value might be affected by the information; and (ii) since it was so made known, a reasonable period for it to be disseminated among such persons has elapsed.”

21 Salbu “Regulation of insider trading”, above at note 17; Hatch, JJ “Logical inconsistencies in the SEC's enforcement of insider trading: Guidelines for a definition” (1987) 44 Washington and Lee Law Review 935Google Scholar.

22 Hazen, TL “Defining illegal insider trading lessons from the European Community Directive on Insider Trading” (1992) 55 Law and Contemporary Problems 231CrossRefGoogle Scholar; Cady, Roberts & Co, above at note 17.

23 Hazen, TL “Identifying the duty prohibiting outsider trading on material non-public information” (2010) 61 Hastings Law Journal 881Google Scholar at 889.

24 For a comprehensive legal analysis of the US approach, see US v O'Hagan 521 US 642 at 655 (1997); SEC v Adler 137 F.3d at 1337; United States v Smith 155 F.3d at 1067; SM Bainbridge “An overview of insider trading law and policy: An introduction to the insider trading research handbook” (4 September 2012), available at: <http://ssrn.com/abstract=2141457> (last accessed 1 September 2013); Bainbridge, SM “Incorporating state law fiduciary duties into the federal insider trading prohibition” (1995) 52 Washington and Lee Law Review 1189Google Scholar; Lobb, J “SEC rule 14e-3 in the wake of United States v O'Hagan: Proper prophylactic scope and the future of warehousing” (1999) 40 William & Mary Law Review 1853Google Scholar; Prakash, S “Our dysfunctional insider trading regime” (1999) 99/6Columbia Law Review 1491CrossRefGoogle Scholar.

25 See generally Salbu, SR “Noninformational tippee trading, and abstention from trading: An analysis of gaps in the insider trading laws” (1993) 68 Washington Law Review 307Google Scholar; Aldave, B “The misappropriation theory: Carpenter and its aftermath” (1988) 49 Ohio State Law Journal 373Google Scholar; O'Hagan, id.

26 See Securities Act Release No 33-7881 (“Selective disclosure and insider trading”), Exchange Act Release No 34-43154 and Investment Company Act Release No IC- 24599, 65 Fed Reg 51716-01 (15 August 2000). These are rules issued by the SEC, the aim of which is to provide guidance relating to the disclosure of material information (with the objective of promoting the full and fair disclosure of information by issuers), as well as to clarify and enhance existing prohibitions against insider trading.

27 Macey, J “Getting the word out about fraud: A theoretical analysis of whistleblowing and insider trading” (2007) 105 Michigan Law Review 1899Google Scholar; Smith, DG “The critical resource theory of fiduciary duty” (2002) 55 Vanderbilt  Law Review 1399Google Scholar; SEC v Lund 570 F Supp 1397 (CD Cal 1983); Dirks v SEC 463 US 646 at 659 (1983). Under certain circumstances, not all of a corporation's agents are employees but it is possible that people like underwriters, accountants, lawyers or consultants may come across privileged information in the course of  their temporary association with the organization. For that reason they are deemed to be constructive insiders and are bound by the classical insider dealing prohibition.

28 O'Hagan, above at note 24 at 655 underscores the fact that, in the absence of deception, mere breach of fiduciary duties does not form the basis of liability; that is simply not enough for misappropriation under rule 10b-5. The rationale is that a misappropriator could breach a duty owed to the source of information and yet not deceive anyone. See also Santa Fe Industries, Inc v Green 430 US 462 (1977). For a comprehensive discussion, see generally Prakash “Our dysfunctional insider trading regime” above at note 24 at 1510.

29 United States v Newman 664 F.2d 12 (1981); US v O'Hagan, ibid.

30 Dirks, above at note 27; United States v Newman, 12 Cr 121 (RJS) (SDNY 7 February 2012); SEC v Obus 693 F.3d 276 (2nd cir 2012).

31 SEC v Maxwell 341 F Supp 2d 941 (SD Ohio 2004).

32 SEC v Yun 327 F.3d 1263 (11th cir 2003).

33 SEC v Blackman 2000 WL 868770.

34 See generally Langevoort, DC “‘Fine distinctions’ in the contemporary law of insider trading” (2013) Columbia Business Law Review 429Google Scholar; Hiler, BA “Dirks v SEC: A study in cause and effect” (1984) 43 Maryland Law Review 292Google Scholar; Menghini, MD “Tippee liability under rule 10b-5 predicated on whether tipper tips to secure personal benefit, Dirks v SEC 103 S Ct 3255 (1983)” (1984) 62 Washington University Law Quarterly 165Google Scholar; Ebaugh, NS “Insider trading liability for tippers and tippees: A call for the consistent application of the personal benefit test” (2003) 39/2Texas Journal of Business Law 264Google Scholar.

35 See generally SM Himes “The amorphous ‘personal benefit’ requirement for insider trading tipping liability securities” (2013), available at: <http://www.ballardspahr.com/alertspublications/articles/~/media/Files/Articles/2013-10-22-Amorphous-Personal-Benefit-Requirement.ashx> (last accessed 20 October 2013).

36 Dirks, above at note 27 at 664.

37 Under sec 78(40)(a) of the FMA, such an insider would nonetheless escape liability if he can prove “on a balance of probabilities that he or she disclosed the inside information because it was necessary to do so for the purpose of the proper performance of the functions of his or her employment, office or profession in circumstances unrelated to dealing in any security listed on a regulated market and that he or she at the same time disclosed that the information was inside information”.

38 SEC v Obus docket no 10-4749 (2nd cir, decided 6 September 2012) (Obus II); DC Langevoort “What were they thinking? Insider trading and the scienter requirement” (2012), available at: <http://scholarship.law.georgetown.edu/facpub/989> (last accessed 21 October 2013).

39 See definition of “inside information” in the FMA, sec 77.

40 Jooste “Critique of the insider trading provisions”, above at note 18 at 443; Blackman, MS, Jooste, RD and Everingham, GK “Commentary on the Companies Act” (2001) 1 Revision Service 1Google Scholar at 5–394; R Tomasic, S Bottomley and R McQueen Corporations Law in Australia (2nd ed, 2002, Federation Press) at 20.9.8.

41 Langevoort “What were they thinking?”, above at note 38 at 5.

42 Obus II, above at note 38.

43 Sec 78 simply refers to “an insider who knows that he or she has inside information …”

44 Until the enactment of the FMA, the FSB heavily relied on sec 78 of the SSA to “withdraw, abandon or compromise” any civil proceedings initiated under the civil process.

45 See FSB “Enforcement actions” (2013), available at: <https:// www.fsb.co.za/enforcementCommittee/Pages/enforcementActions.aspx> (last accessed 22 October 2013).

46 Sec 77 of the SSA stated that insider dealing violations were subject to a civil liability regime. Although this was the case in South Africa, unlike in the US, there is no precedent of any civil trial relating to insider dealing in South Africa. The South African judiciary's involvement has mainly been in rubber-stamping out of court settlements reached between the FSB and violators. See FSB Enforcement Actions, ibid.

47 See SEC “SEC enforcement actions: Insider trading cases”, available at: <www.sec.gov/spotlight/insidertrading/cases.shtml> (last accessed 22 October 2013); see also SEC “SEC enforcement actions: Addressing misconduct which led to or arose from the financial crisis”, available at: <www.sec.gov/spotlight/enf-actions-fc.shtml> (last accessed 22 October 2013); Heminway, JM “Just do it! Specific rulemaking on materiality guidance in insider trading” (2012) 72 Louisiana Law Review 999Google Scholar.

48 Since F van Zyl made his observation in 1994, there has been no change in those statistics; South Africa is yet to levy criminal charges against anyone for insider dealing and for that reason there is no corpus of insider dealing convictions. See Van Zyl “South Africa insider trading regulation”, above at note 19.

49 See SEC “SEC enforcement actions: Insider trading cases”, above at note 47; Atkins, PS and Bondi, BJ “Evaluating the mission: A critical review of the history and evolution of the SEC enforcement program” (2008) 13 Fordham Law Review 367Google Scholar.

50 18 USC sec 1305(c) (2002). See also S Brody “Criminal insider trading: Prosecution, legislation, and justification” (October 2009), available at: <http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=steven_brody> (last accessed 23 October 2013); JH Thompson “A global comparison of insider trading regulations” (2013) 3/1 International Journal of Accounting and Financial Reporting 1.

51 See generally Symposium “The federal sentencing guidelines: Ten years later” (1997) 91 Northwestern University Law Review 1231Google Scholar; SEC v Sargent 229 F.3d 68, 75 (1st cir 2000). See also United States v Pruett Lwc No 11-30572, slip op (5th cir, 15 May 2012) and Williams v Illinois No 10-8505, 2012 WL 2202981 (US, 18 June 2012).

52 Safeguards are available under sec 806 of Sarbanes-Oxley Act (18 USC § 1514A) (supp 11 2003) for employee whistle-blowers who report forms of corporate misconduct. Such protection covers all instances the employee inter alia files, testifies, participates in, or assists in any proceeding relating to an alleged violation of securities laws. Furthermore, under rule 10A-3 of the Exchange Act, the New York Stock Exchange, NASDAQ and other stock market self-regulatory organizations have an obligation to ensure that the audit committees of listed companies have in place formal procedures dealing with whistle-blowers’ complaints relating to accounting and auditing matters. See also JR Macey “Getting the word out about fraud: A theoretical analysis of whistleblowing and insider trading” (2007), available at: <http://digitalcommons.law.yale.edu/fss_papers/1383> (last accessed 24 October 2013). See also B Masters and D McCrum “Gulf between US and UK insider trading” (26 January 2012) Financial Times, available at: <http://www.ft.com/intl/cms/s/0/d2f943ae-4811-11e1-a4e5-00144feabdc0.html#axzz3dnHmZM62> (last accessed 22 June 2015).

53 See for example Pitt, HL and Hardison, DB “Games without frontiers: Trends in the international response to insider trading” (1992) 55/4Law and Contemporary Problems 199CrossRefGoogle Scholar at 223; N Poser Broker-Dealer Law and Regulation (2 leaf ed, 1997, Aspen Law and Business, 1997).

54 See Steinberg International Securities Law, above at note 6 at 2.

55 Prakash “Our dysfunctional insider trading regime”, above at note 24 at 1493.

56 Prentice “Permanently reviving the temporary insider”, above at note 1; Cox, JD “Choices: Paving the road toward a ‘definition’ of insider trading scholarship” (1998) 39 Alabama Law Review 381Google Scholar.

57 Hazen, TL “Identifying the duty prohibiting outsider trading on material non-public information” (2010) 61 Hastings Law Journal 881Google Scholar at 914.

58 Steinberg International Securities Law, above at note 6 at 12.

59 Id at 16. See also Padilla, A “Should the government regulate insider trading?” (2011) 22 Journal of Libertarian Studies 379Google Scholar. Further sharp criticism is premised on the understanding that, by having no insider dealing definition, “market professionals and other investors lack the specific guidance that a statutory definition of insider trading would provide. Under any circumstances, the ambiguities in this area of the federal securities laws would be unsettling. In today's international securities markets, however, such ambiguities are inexcusable”: Pitt and Hardison “Games without frontiers”, above at note 53 at 223.

60 See generally Capec, MG “SEC rule 10B5-2: A call for revitalizing the commission's efforts in the war on insider trading” (2008–09) 37 Hofstra Law Review 805Google Scholar.