11th Cir. Pattern Jury Instr. (Civil) 6.3.1

17 C.F.R. §§ 240.10b-5 – Insider Trading – Private-Plaintiff Version

[Name of plaintiff] asserts a claim under the Securities Exchange Act of

1934.

The Securities Exchange Act is a federal statute that allows the Securities

and Exchange Commission, also known as the SEC, to enact rules and regulations

prohibiting certain conduct in the purchase or sale of securities. Exchange Act § 10

(b) and Rule 10b-5(a) make it unlawful for a person to employ any device, scheme,

or artifice to defraud someone else in connection with the purchase or sale of any

security.

A “security” is an investment in a commercial, financial, or other business

enterprise with the expectation that profits or other gain will be produced by

others. Some common types of securities are [stocks,] [bonds,] [debentures,]

[warrants,] [and] [investment contracts]. [The [describe type of security] in this

case is a security.]

A person who claims that someone violated Exchange Act § 10 (b) and Rule

10b-5(a) may bring a civil action for damages that [he/she/it] suffered as a result of

the violation.

In this case, [name of plaintiff] claims that [name of defendant] committed

fraud by engaging in “insider trading” in the stock of [name of stock]. [Name of

plaintiff] further claims that [he/she/it] purchased stock of [name of stock] at the

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same time that [name of defendant] engaged in insider trading, and [he/she/it]

suffered a loss as a result.

To prove [his/her] claim that [name of defendant] engaged in insider trading

in violation of Exchange Act § 10 (b) and Rule 10b- 5(a), [name of plaintiff] must

prove each of the following five elements by a preponderance of the evidence:

First, you must find that [name of defendant] used an instrumentality of

interstate commerce in connection with the purchase or sale of a security.

Second, you must find that [name of defendant] used a device, scheme, or

artifice to defraud someone in connection with the purchase or sale of a security.

Third, you must find that [name of defendant] acted knowingly or with

severe recklessness.

Fourth, you must find that [name of plaintiff]’s [purchase] [or] [sale] of

[name of stock] stock was contemporaneous with [name of defendant]’s insider

trading.

And fifth, you must find that [name of plaintiff] suffered damage because of

[his/her] [purchase] [or] [sale] of the stock.

[In the verdict form that I’ll explain in a moment, you’ll be asked to answer

questions about these factual issues.]

Now I’ll provide you with some additional instructions to help you as you

consider the facts [name of plaintiff] must prove.

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