Dirks Test

A standard used by the Securities and Exchange Commission (SEC) to determine whether someone who receives and acts on insider information (a tippee) is guilty of insider trading. The Dirks Test looks for two criteria

1. Whether the individual breached the company's trust
2. Whether the individual did so knowingly

Tippees can be found guilty of insider trading if they know or should know that the tipper has committed a breach of fiduciary duty.

The test is named after the 1984 Supreme Court case Dirks v. SEC, which established the conditions under which tippees can be held liable for insider trading. An individual does not actually have to engage in a trade to be guilty of illegal insider trading; merely facilitating an inside trade by disclosing material nonpublic information about a company is sufficient to be liable for illegal insider trading. It is also not necessary to be a manager or employee of the company; friends and family who have access to such information and disclose it when they shouldn't can also get into trouble.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Glaser-Dirks DG-100 — DG 100 Role Club class (formerly Standard class) sailplane National origin Germany Manufacturer Glaser Dirks/DG Flugzeugbau …   Wikipedia

  • List of gliders — Abbott Baynes Sailplanes Ltd= =Abrial= *Abrial A 12 Bagoas *Abrial A 2 VautourAdvanced Aeromarine*Advanced Aeromarine SierraAdvanced Soaring Concepts*Advanced Soaring Concepts Falcon *Advanced Soaring Concepts Spirit *Advanced Soaring Concepts… …   Wikipedia

  • Список Планёров — Содержание 1 Abbott Baynes Sailplanes Ltd 2 Abrial 3 Advanced Aeromarine 4 …   Википедия

  • Список планёров — Содержание 1 Abbott Baynes Sailplanes Ltd 2 Abrial 3 Advanced Aeromarine 4 Advan …   Википедия

  • List of contaminated cell lines — This is a list of cell cultures which have been cross contaminated and overgrown by other cells. A project is currently underway to enumerate and rename contaminated cell lines to avoid errors in research caused by misattribution (Masters, 2002) …   Wikipedia

  • Periyar E. V. Ramasamy — For other uses, see Periyar (disambiguation). Periyar E. V. Ramasamy Periyar E. V. Ramasamy during his early life as a merchant Born 17 September 1879(1879 09 17) Erode, Madras P …   Wikipedia

  • NUPACK — URL nupack.org Commercial? No Registration Optional Created by The NUPACK Team at Caltech The …   Wikipedia

  • Max und Moritz — Max (links) und Moritz Max und Moritz – Eine Bubengeschichte in sieben Streichen ist ein Werk von Wilhelm Busch. Das Werk wurde am 4. April 1865 erstveröffentlicht und zählt damit zum Frühwerk von Wilhelm Busch. Es weist jedoch im Handlungsgefüge …   Deutsch Wikipedia

  • Rappelz — Infobox VG title = Rappelz Epic 5 Dragonic Age developer = nFlavor publisher = Gala Net Inc released = November 03, 2006 genre = Fantasy MMORPG modes = Multiplayer platforms = Windows media = Download (1.93 GB client) cite web |author =|… …   Wikipedia

  • Coeliac disease — Classification and external resources Biopsy of small bowel showing coeliac disease manifested by blunting of villi, crypt hyperplasia, and lymphocyte infiltration of crypts ICD 10 …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.