M. Breen Haire


The Uneasy Doctrinal Compromise of the Misappropriation Theory of Insider Trading Liability

M. Breen Haire

This Note examines the nature of the doctrinal compromise that the misappropriation theory represents. It focuses on the uneasy relationship among the three doctrinal models and argues that, in fact, the misappropriation theory marks a fundamental departure from the Supreme Court’s more sensible fiduciary duty analysis, and differs in no meaningful way from an equal access regime of insider trading liability. Since the wrongful activity to which the misappropriation theory attaches liability is so distantly related to the securities trading at issue, any claim that it retains the fiduciary duty framework is simply implausible. Like the equal access model, the theory stretches applicable statutory provisions beyond recognition and cannot be reconciled with the Supreme Court’s past interpretation of these provisions.

The Fiduciary Responsibilities of Investment Bankers in Change-of-Control Transactions: In re Daisy Systems Corp.

M. Breen Haire

This Comment examines the mischief that the Daisy ruling could make. Though advisors such as attorneys and auditors have previously been held to be fiduciaries of their clients, the Daisy court’s broad application of these duties to investment bankers poses unique problems. The first Part begins with a brief survey of pre-Daisy cases dealing with the responsibilities owed by bankers to their clients, and then turns to Daisy itself. The second Part discusses the Daisy court’s broad conception of the role of bankers in change-of-control transactions. The final Part is a policy and doctrinal critique of the Daisy rule, focusing especially on the undesirable incentives provided to bankers as a result of the holding. The Comment concludes that the court’s decision in Daisy promulgates a liability regime desirable neither as a matter of corporate governance nor as a shareholderprotection device.