The following excerpt is from U.S. v. Chestman, 903 F.2d 75 (2nd Cir. 1990):
Rule 14e-3, although it does not use the term, effectively gives insider status to any person, except the tender offeror, exclusively and based upon his possession of nonpublic information which he knows or has reason to know has been acquired directly or indirectly from: (1) the offering person, (2) the issuer of the securities sought or to be sought by such tender offeror, or (3) any officer, director, partner, or employee or any other person acting on behalf of the offering person or such issuer. The rule declares "it shall constitute a fraudulent, deceptive or manipulative act or practice within the meaning of section 14(e) of the Act " for the insider to trade in such securities unless within a reasonable time prior to any purchase or sale, such information and its source are publicly disclosed by press release or otherwise. 17 C.F.R. Sec. 240.14e-3(a) (emphasis added). This type of provision has been characterized as a "disclose or abstain" rule. Cf. Chiarella v. United States, 445 U.S. 222, 227, 100 S.Ct. 1108, 1114, 63 L.Ed.2d 348 (1980) (construing rule 10b-5, 17 C.F.R. 240.10b-5).
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