Misappropriation theory

The misappropriation theory holds that trading on confidential information in breach of a duty owed to its source is securities fraud, even where no duty is owed to the people on the other side of the trade.

instruments and markets · updated 2026-09-08

Where does misappropriation theory come up?

This term is used in the following manipulation techniques, each explained in full on its own page.

• Insider trading — Insider trading is dealing in securities on material non-public information in breach of a duty of trust or confidence, which exploits a true signal others cannot see rather than injecting a false one into the price.

Enforcement actions involving these techniques

See also

• Insider trading — Insider trading is dealing on material non-public information in breach of a duty of trust or confidence. It is distinct from mani…
• Material non-public information — Material non-public information is information a reasonable investor would consider important that has not been disclosed to the m…

Terms that refer here

Insider trading

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