What Is “Contemporaneous Trading” under Section 20A?

A recent motion in In re Valeant Pharmaceuticals International, Inc., raises important questions regarding the scope of the “contemporaneous trading” requirement found in section 20A of the Securities Exchange Act of 1934. Section 20A provides a private right of action for investors who traded “contemporaneously” with someone trading on inside information. In the Valeant case, certain defendants filed a motion for immediate appeal under 28 U.S.C. § 1292(b), seeking an interlocutory appeal in order to answer the question of whether the availability of a cause of action under section 20A is limited to those plaintiffs who purchased securities on the same day as the defendant’s sale or whether recovery is also available to those who purchased the securities at a later date.