Trading Places is often considered to be one of Eddie Murphy‘s best movies. But probably not to lawmakers. On the surface, the screwball comedy movie doesn’t have a lot of legal implications, but it actually teaches us a lot about the stock market, with one four-minute sequence in the ‘80s movie actually causing a very significant legal change to be implemented in Wall Street.
In Trading Places, Murphy plays Billy Ray Valentine, a con artist who ends up having his fortune switched with affluent investor, Louis Winthorpe III (Dan Aykroyd). Their fortunes are switched as part of a cruel bet between millionaire brothers, Randolph (Ralph Bellamy) and Mortimer Duke (Don Ameche).
Towards the end Trading Places, Valentine and Winthorpe get their own back against the brothers by feeding them a fake United States Department of Agriculture report. This leads to the brothers committing themselves to investing in frozen orange juice stocks — only for the actual USDA report to cause the value of their stocks to sink drastically, which, in short, helped Valentine and Winthorpe turn a huge profit, and led to the Dukes losing a huge amount of money.
This scene ended up heavily influencing the US stock market, with ‘Section 136 of the Dodd-Frank Wall Street Transparency and Accountability Reform and Consumer Protection Act, under Section 746’ being written into law. Or, as the catchy amendment is more commonly known, the ‘Eddie Murphy rule.’
The Eddie Murphy rule’ made it illegal to misuse internal government information when it comes to the practise of selling and buying stocks. So, under the ‘Eddie Murphy rule,’ Valentine and Winthorpe actually giving them a USDA report so that they can use it to influence their future stock market decisions would be illegal.
If all of that has given you a bit of a headache, you might want to wind down with a trip to the cinema, in which case, here are all the new movies coming your way this year.