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Definition of 'Misappropriation Theory'
A perspective that defines the act of stealing confidential information from an employer and then trading securities based on the misappropriated insider knowledge. In the United States, a person guilty according to the misappropriation theory will likely be convicted of insider trading.
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Investopedia explains 'Misappropriation Theory'
The misappropriation theory gained prominence in the Supreme Court's conviction of James H. O'Hagan. O'Hagan was an attorney who acted on insider information regarding a takeover bid for Pillsbury. The United States versus O'Hagan was a watershed case for the theory, defining its validity.
This take on insider trading expands the traditional view of what constitutes guilt. Instead of looking only at people who trade their own companies' shares based on stolen information, the theory extends to those who use the knowledge to profit in any corporation.
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Search results for 'Misappropriation Theory'
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http://www.investopedia.com/articles/03/100803.asp
... However, according to the misappropriation theory of insider trading cases, certain
other relationships automatically give rise to confidentiality. ...
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http://www.investopedia.com/articles/financial-theory/11/detecting-financial-fraud.asp
... Asset misappropriation and corruption tend to occur at a much greater frequency,
yet the financial impact of these latter crimes is much less severe. ...
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http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-nonpublic-information.asp
... Futures; Personal Finance; Retirement. Acronyms; Accounting; Bonds; Buzzwords;
Currencies; Economics; Financial Theory; Formulas; Hedge Funds. ...
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http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-loyalty.asp
... Futures; Personal Finance; Retirement. Acronyms; Accounting; Bonds; Buzzwords;
Currencies; Economics; Financial Theory; Formulas; Hedge Funds. ...
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http://www.investopedia.com/articles/economics/12/corporate-criminals.asp
... He was charged with "misappropriation of corporate funds," which is what you do
when you reach into the petty cash drawer to buy lunch, only Kozlowski did it ...
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http://www.investopedia.com/exam-guide/series-26/supervisory-systems/finra-conduct-rules.asp
... Violation of any securities law or regulation; Receipt of customer complaint involving
allegations of theft, forgery or misappropriation of funds; ...
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