SEC Wins Trial in Novel ‘Shadow’ Insider Trading Crackdown (2)

The US Securities and Exchange Commission won a jury verdict in its ground-breaking insider-trading case that seeks to bar employees from using non-public information about their own company to place bets on rival stocks.

The closely watched two-week San Francisco civil trial was the regulator’s first enforcement action targeting so-called shadow trading, a widespread phenomenon that researchers say has gone largely unchecked. Congress has never explicitly defined insider trading, leaving courts to decide when the SEC oversteps its authority.

Friday’s verdict comes as SEC enforcement chief Gurbir Grewal has brought cases that have pushed the agency into new territory — ...