New York, November 28, 2012—As chairman of the Securities and Exchange Commission in 1961, longtime Columbia Law School Professor William L. Cary famously delivered an administrative opinion that laid the foundation for modern insider trading law.
Since then, the legacy of his decision has continued to evolve as insider trading prosecutions have taken center stage in the aftermath of the financial crisis.
| (standing) Manuel F. Cohen and Jack M. Whitney III; (seated) Byron D. Woodside, William L. Cary and J. Allen Frear, Jr.
Photo courtesy of www.sechistorical.org
It was during his tenure as chairman that Cary penned the administrative opinion In re: Cady, Roberts & Co. Before the decision, there were a variety of state rules governing insider trading. Cary articulated the first clear standard under federal securities law: Anyone with non-public material information must disclose it to the market before trading or else abstain from trading. To trade without disclosing would constitute insider trading.
In 1964, Cary left Washington, D.C., and returned to Columbia Law School as the Dwight Professor—a position named in honor of the Law School’s first professor, Theodore W. Dwight.
“His legacy is much broader than just Cady, Roberts,” Eisenberg said.
Cary served in the U.S. Marine Corps during World War II and earned promotion to the rank of major, according to his 1983 obituary in the New York Times. In 1944 and 1945, he travelled to Romania and what was then Yugoslavia as an officer in the Office of Strategic Services.
After joining Columbia Law School, he taught corporate and tax law until his retirement in 1979. In one of many accomplishments, he wrote “Federalism and Corporate Law: Reflections on Delaware,” an article that appeared in the Yale Law Journal in 1974 and called for national standards for corporate governance.
|Stephen J. Crimmins '73|
Crimmins said Cary was low-key in his presentation style, “but his sentences were packed with thought and analysis.”
“He absolutely was the world class professor to have in any class,” said Crimmins, who was a panelist at the conference. “And as far as his personal qualities, he cared about us and he would approach us and he was just a wonderful human being.”