Court Opinion

ID: 9585532
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:01:27.106057+00
Date Added: 2024-06-11T15:46:41.135684
License: Public Domain

Judge BECTON
dissenting.
Believing that our primary concern in inside trader actions should be to deter the instigator, the tipper, and, therefore, that the in pari delicto defense should not be allowed, I dissent. A tip-pee’s private cause of action against the tipper for the recovery of commissions and margin interest eliminates any illegal profit by the tipper. More importantly, it effectively discourages the tipper from distributing inside information, thereby eliminating the tippee’s temptation to participate in the illegal activity.1 Further, the tippee is not equally at fault. I would, therefore, affirm the trial court’s order.

. See Berner v. Lazzaro, 730 F. 2d 1319 (9th Cir. 1984).