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Chancery Upholds State Law Claim for Insider Trading

By Francis G.X. Pileggi

Pfeiffer v. Toll, C.A. No. 4140-VCL (Del. Ch. March 3, 2010), read opinion here. This scholarly decision upheld state law claims against directors for insider trading. The Court of Chancery rejected the argument that federal law preempted state law for such claims. For anyone who wants to know the latest Delaware law on insider trading claims, and the Brophy line of cases, this is must reading. The Court cited in its decision to nationally prominent corporate law professor Stephen Bainbridge. See Slip op. at 35, 36, and 41 (citing Stephen M. Bainbridge, Securities Law: Insider Trading 15-16 (2d ed. 2007)). Of course, regular readers of this blog know that the Delaware Court of Chancery and the Delaware Supreme Court have cited to Professor Bainbridge's scholarship many times in prior opinions.

The good professor has already penned thoughtful commentary on this opinion with extensive insight and analysis.We are fortunate to have this nationally recognized expert's review of this case. (It makes my job easier). Thus, I commend to you Professor Bainbridge's discussion of this case, especially  regarding the interface between state and federal law in connection with insider trading, available on his blog here and here.

P.S.  Professor Larry Ribstein, another prolific, nationally recognized expert whose scholarship is often cited by the Delaware Courts, has just provided his scholarly insights on this case here.

Full post as published by Delaware Corporate and Commercial Litigation Blog on March 11, 2010 (boomark / email).