Unit 9 Discussion – the Case of Falbo

Unit 9 Discussion – the Case of Falbo . Considering the case held against Falbo, his act of using confidential information for his personal gain make his case to fall under the Misappropriation Theory. According to Misappropriation Theory, any individual who accesses and uses any confidential information wrongfully to purchase or sell securities is considered as being guilty of securities fraudulence. According to Wolfson (1990), misappropriation is a infringement of a responsibility owed to the individual who provided the confidential information and then goes further to share the information with others or act with regard to the confidential information.

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On this basis, she has a case to answer in the court concerning his misconduct nature in the company. The Securities Exchange Act section 10(b) provides that, it is not right for any individual to directly or indirectly to interstate commerce in connection with the purchase of securities. This implies that, the executive’s secretary needed no to disclose such private and confidential information to Falbo. Generally, both Falbo and the secretary have breached their fiduciary duties.  Unit 9 Discussion – the Case of Falbo.


Roush, C. (2004). Writing business and economics stories: The SEC law. London: Lawrence         Erlbaum Associates.    

Wolfson, N. (1990). Amendment rights and the SEC. New York: Quorum Books.