15 U.S.C. § 78t–1 — Liability to contemporaneous traders for insider trading

(a) Private rights of action based on contemporaneous trading If someone breaks a securities law by buying or selling a security while they have material, nonpublic information, they can be sued. The people who can sue are those who traded the same class of security around the same time, on the opposite side of the trade. If the inside trader bought, the people who sold around the same time can sue. If the inside trader sold, the people who bought around the same time can sue. (b) Limitations on liability (1) Contemporaneous trading actions limited to profit gained or loss avoided. A court can't award more in damages than the profit the inside trader gained, or the loss the inside trader avoided, from the trades at issue. (2) Offsetting disgorgements against liability. If the SEC already made the inside trader give back profits ("disgorge") in its own court case about the same trades, that amount is subtracted from what the inside trader owes under this law. (3) Controlling person liability. Just employing someone who is liable under this law doesn't make the employer liable too. But if the employer is a "controlling person," section 78t(a) of this title still applies to them. (4) Statute of limitations. A lawsuit under this law must be filed within 5 years of the last trade involved in the violation. (c) Joint and several liability for communicating Someone who tips off another person with material, nonpublic information — instead of trading themselves — is just as liable as the person they tipped, and to the same extent. (d) Authority not to restrict other express or implied rights of action This law doesn't take away or limit any other right to sue under this chapter, including rights that courts have recognized even though the law doesn't spell them out directly. (e) Provisions not to affect public prosecutions This law doesn't stop or limit the SEC or the Attorney General from bringing their own cases under any other part of this chapter. It also doesn't limit actions to recover penalties, or other court orders about penalties.