In September 2016, the SEC commenced a civil enforcement action against hedge fund manager Leon G. Cooperman and his investment advisory firm, Omega Advisors, Inc. (Omega), charging that Cooperman received and traded on material nonpublic information (MNPI) and committed more than 40 violations of the beneficial ownership reporting requirements under federal securities laws. See “Alleging Dozens of Violations, SEC Charges Leon Cooperman and Omega Advisors With Insider Trading and Failing to Make Regulatory Filings” (Sep. 29, 2016). In response to the defendants’ motion to dismiss the SEC’s complaint for failure to state a claim for insider trading and improper venue for the reporting violations, the U.S. District Court for the Eastern District of Pennsylvania (Court) recently dismissed the reporting violation claims but ruled that the SEC’s insider trading claims could proceed. In its Memorandum accompanying the Order, the Court addressed a novel issue as to whether a defendant could be held liable under the misappropriation theory of insider trading where he entered into an explicit agreement not to trade after he received MNPI but before he traded on it. This article summarizes the Court’s Memorandum. For more on the misappropriation theory of insider trading, see “How Can Hedge Fund Managers Apply the Law of Insider Trading to Address Hedge Fund Industry-Specific Insider Trading Risks? (Part Two of Two)” (Aug. 15, 2013); and “When Does Talking to Corporate Insiders or Advisors Cross the Line Into Tipper or Tippee Liability Under the Misappropriation Theory of Insider Trading?” (Jan. 10, 2013).