Chiarella v. United States

Chiarella (defendant), an employee at a printing company handling redacted corporate takeover documents, deciphered the identity of target companies from draft agreements and traded on that nonpublic information for $30,000 in profit; the United States (plaintiff) charged him with securities fraud under Section 10(b) for nondisclosure, and the jury was instructed to convict if he traded using material nonpublic information he knew others in the market lacked. A jury convicted him, the court of appeals affirmed, and the Supreme Court granted certiorari.