5. 521 U.S. 642 (1997).
6. See SEC Release Notice, Release No. 7881, 2000 WL 1201556, at *24-25 (2000).
7. See United States v. Chestman, 947 F.2d 551, 566-67 (2d Cir. 1990); see also O'Hagan, 521 U.S. at 652 (stating that the misappropriation theory is premised on a "fiduciary's undisclosed, self-serving use of a principal's information…in breach of a duty of loyalty and confidentiality").
8. Chestman, 947 F. 2d at 569.
9. SEC Release Notice, Release No. 7881, 2000 WL 1201556, at *2. For an example of the inconsistency with which different courts interpreted a "duty of trust or confidence" pre-Rule 10b5-(2), compare SEC. v. Yun, 327 F.3d 1263, 1272-73 (11th Cir. 2003) (finding a "history or practice of sharing [and maintaining] business confidences" between spouses gave rise to a duty of confidentiality between the spouses), with United States v. Kim, 184 F. Supp. 2d 1006, 1013 (N.D. Cal. Jan. 15, 2002) (finding that a confidentiality agreement, and history of exchanging confidential business information, amongst members of a young professionals social club did not create a duty of confidence amongst the members). Although both cases were decided after the passage of Rule 10b5-(2), both cases involved acts predating the Rule 10b5-(2), and thus were decided without reliance on the Rule.
10. 17 C.F.R. §240.10b5-(2) (emphasis added).
11. A similar position was advocated to the SEC in the notice-and-comment process by the American Bar Association and the New York City Bar. As the SEC noted in its Release, those commenters "suggested that this part of the rule be limited to a history, pattern, or practice of sharing business confidences." SEC Release Notice, Release No. 7881, 2000 WL 1201556, at *26 (emphasis in original). While the SEC stated that it "determined not to adopt such a limitation," it "note[d] that evidence about the type of confidences shared in the past might be relevant to determining the reasonableness of the expectation of confidence." Id. (emphasis added). Thus, while the SEC refused to limit the reach of the rule, courts have arguably followed Chestman's guidance and have generally looked for the confidential sharing of business or securities-related information in determining whether the requisite duty arose.
12. Complaint at ¶¶31-32, SEC v. McGee, (No. 12-1296), 2012 WL 803578 (March 13, 2012).
13. Compl. at ¶36.
14. Compl. at ¶37.