Credit default swaps became notorious financial instruments and symbols of financial engineering run amok during the 2007-8 financial crisis. Once worth over $60 trillion a year, the credit default swap market has shrunk significantly, but it is still worth nearly $10 trillion a year.1 A credit default swap is a financial derivative contract that pays…
Tag: credit default swaps
Insider Trading Regulation of Derivatives under SEC Rule 10(b)-5 and Dodd Frank
The SEC generally refers to illegal insider trading as “the act of buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.”1 Intuitively, many people feel insider trading is an unfair abuse of information asymmetries that allows…