Book Review – Insider Trading (Corporate Law 1)

Insider Trading (Corporate Law 1), edited by Stephen M. Bainbridge. Jonathan R. Macey, series editor. Edward Elgar Publishing Ltd. Hardback, 740 pages, $365.

At more than 700 pages, Insider Trading can be described as being both dense in size and subject matter. UCLA Professor Stephen M. Bainbridge’s website describes him as being a prolific scholar who has written more than 75 articles with an emphasis on the law and economics of public corporations and who, as editor of Insider Trading, has compiled 15 articles on the subject from law reviews and other related sources. This volume is a part of Edward Elgar’s Corporate Law series, in which each volume features significant scholarly work in the field. Since most of the articles within can be found on typical legal databases (Lexis, Westlaw, HeinOnline, etc.), I recommend this book only for the truly hardcore lover of insider trading or perhaps those looking for articles that have been deemed seminal by an expert in the field. I cannot imagine the book being housed in any library other than academic. 

The book begins with Bainbridge’s introduction, in which he gives a short history of our courts’ views on insider trading and how those views have evolved throughout the years. Bainbridge states insider trading is among the most common violations of federal securities laws and notes it’s the only securities law that receives notice from nonlegal sectors of the public, citing Oliver Stone’s Wall Street as an example of how Hollywood has portrayed the crime. After briefly mentioning key court cases, he notes case law is extremely important in this field due to the lack of a definition of “insider trading” from either federal statutes or regulations. After this short 16-page introduction, the book is divided into six parts, with each part having two to four articles. 

I.   Origins and Development of Insider Trading Law

II.  The Supreme Court’s Decisions in Chiarella Dirks

III. The Misappropriation Theory Emerges

IV. Insider Trading Statutes

V.  Insider Trading Policy: The Manne Debate

VI. Insider Trading Policy: The Post-Manne Debate           

The articles within cover roughly a 40-year time period, and a cursory web search of some of the authors (Arthur Fleischer Jr., Donald C. Langevoort, and Henry G. Mann, among others) indicates they are recognized as serious scholars on the topic. The editor notes the articles within have been reproduced as originally published using facsimile reproduction, including footnotes and pagination to facilitate ease of reference. The book does not have an index or any appendices whatsoever, and after the last article (a photocopy of Bainbridge’s article titled “Insider Trading” from the Encyclopedia of Law and Economics, Volume III: The Regulation of Contracts, 2000, complete with page numbering from the original source), it ends abruptly.

As this book is the first in Edward Elgar’s new Corporate Law series, no indication is given as to whether further revisions will happen in the future. I imagine all that could be done, revision wise, to a collection of articles of this sort would be to include new seminal works as they are published. The preface of the book does indicate, however, that the next book in the series will be Mergers and the Market for Corporate Control, which will be edited by Fred S. McChesney.  

Lance Burke is access services librarian at Elon School of Law in Greensboro, North Carolina.