Dorozhko hacked into the corporate network of Thomson Financial on October 17, 2007 at 2:15 P.M. and

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Dorozhko hacked into the corporate network of Thomson Financial on October 17, 2007 at 2:15 P.M. and gained access to IMS Health’s soon-to-be-released negative earnings announcement due out at 5:00 P.M. He purchased $41,670 worth of put options. IMS shares were trading at $29.56 at the close on October 17. On October 18, 2007, IMS Health’s stock price plunged at the opening of trading to $21.20 per share, on the negative news issued at 5:00 P.M. on October 17. Within six minutes, Dorozhko sold the put options for a net profit of $286,456. Did Dorozhko’s “hacking and trading” violate either the traditional or misappropriation theories of “insider trading”?

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Andersons Business Law and the Legal Environment

ISBN: 978-1133587583

22nd edition

Authors: David P. Twomey, Marianne M. Jennings

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