2013 William & Mary Business Law Review Best Student Note Award
The material non-public information financial services firms receive from clients utilizing commercial banking services may often prove beneficial to the firm’s trust account clients if the information is used in making investment decisions for these trust accounts. Consequently, financial services firms confront two equally dubious options: to utilize the information to benefit the trust account client and break insider trading laws, or to disregard the information and seemingly violate the firm’s fiduciary duty to the trust account client. To successfully defend against either of the above claims, firms should establish and maintain effective Chinese Walls between private and public side departments and demonstrate that decisions made with respect to private and public side clients are not tainted by conflicting interests. A recent case tried in the Southern District of New York, Aftra v. JPMorgan, provides an opportunity to inspect these problems in light of the 2008 financial crisis.