The COVID-19 pandemic has had an unprecedented impact on global securities markets. Following some stark public examples of the potential misuse of material nonpublic information (“MNPI”) when trading securities, the leaders of the US Securities and Exchange Commission (“SEC”) Division of Enforcement issued a strong warning yesterday against violating US insider trading laws. The SEC Enforcement Division Co-Directors, Stephanie Avakian and Steven Peikin, invoked the Coronavirus when bluntly admonishing:

[I]n these dynamic circumstances, corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances. This may particularly be the case if earnings reports or required SEC disclosure filings are delayed due to COVID-19. Given these unique circumstances, a greater number of people may have access to material nonpublic information than in less challenging times. Those with such access – including, for example, directors, officers, employees, and consultants and other outside professionals – should be mindful of their obligations to keep this information confidential and to comply with the prohibitions on illegal securities trading. Trading in a company’s securities on the basis of inside information may violate the antifraud provisions of the federal securities laws.
Continue Reading Profiting Off Pandemic: The SEC Issues a Sharp Reminder About Companies’ Obligations Regarding Insider Trading and MNPI