Insider Trading Claims Survive if Close in Time

The U.S. Circuit Court of Appeals for the Ninth Circuit recently held that a plaintiff bringing an insider trading claim under Section 20A of the Securities Exchange Act of 1934 does not need to allege or prove that she sold a security to or purchased a security from the defendant. Rather, the plaintiff must show that she purchased "the same class" of security "contemporaneously" with the defendant's trading activity. The decision highlights that investors must always think carefully about whether they possess material, non-public information before trading, even when they are trading in the private market after hours.