CHARLAYNE HUNTER-GAULT: The case before the Supreme Court today deals with insider stock trading and who is an insider and who is not. To help us understand that, what difference it makes, and what happened in today’s arguments we have NewsHour regular Stuart Taylor, correspondent for the American Lawyer and Legal Times. And Stuart, as you are best equipped to do, explain in the simplest terms what is insider trading.

STUART TAYLOR, The American Lawyer: There’s a big argument about this, but in the usual lay sense, what most people mean, is insider trading would be trading a company’s securities, stocks, bonds, for profit, typically a big profit, based on inside information about that company’s value stolen from somebody. The classic case might be the president of an oil company that’s publicly traded learns that they’ve just scored a huge hit, a new discovery, and the stock’s going to go through the roof in a week when they announce it. And he goes out and buys a bunch of the stock beforehand. He’s stealing his own company’s information from his other shareholders, if you will, for his personal profit.

CHARLAYNE HUNTER-GAULT: It doesn’t matter how he learned it?

STUART TAYLOR: In the usual sense, in the general sense in which I’m defining it, the Supreme Court has said not everything that might be called insider trading, the way I’ve just defined it, is, in fact, barred by the federal securities laws.

CHARLAYNE HUNTER-GAULT: Well, let’s don’t go there yet.

STUART TAYLOR: Right.

CHARLAYNE HUNTER-GAULT: Let’s continue on where we are. So anybody–did you have another example?

STUART TAYLOR: Well, in this case it’s a little trickier because he didn’t supposedly steal the money from the company whose stock he was trading–and that’s part of what the argument is about–he stole it from another company that was planning a takeover.