S.E.C. v. Dorozhko

Hours before IMS Health's earnings were officially released, a hacker breached data-hosting company Thomson's server and downloaded the report, and Dorozhko (defendant), who had never used his trading account before, then bought large amounts of IMS put options betting on a major stock decline, profiting heavily overnight after IMS's earnings missed expectations and its stock fell 28%; the SEC (plaintiff) alleged Dorozhko was the hacker and sued for securities fraud under Section 10(b), but the district court denied a preliminary injunction, reasoning that hacking wasn't deceptive under Section 10(b) absent a breach of fiduciary duty, which Dorozhko as an outsider owed no one.