Eliezer Fich, associate professor of finance at LeBow College of Business, wrote an article for CNBC on findings outlined by his research paper co-authored with Jie Cai, an assistant professor of finance at LeBow College, and Anh Tran, entitled “Stock Option Grants to Target CEOs During Private Merger Negotiations.”
“My co-authors and I were baffled to discover that target CEOs, such as Marvel’s Perlmutter, are not technically in violation of Sections 10(b) and/or 16(b) of the 1934 Securities Act which penalize insider trading,” Fich writes. “Specifically, these laws state that ‘any person purchasing or selling a security while in possession of material, nonpublic information shall be liable in an action in any court of competent jurisdiction…’.”