News & Analysis as of

US v Salman

Allen Matkins

SEC Alleges Tipper Received Or Expected A Benefit, But Fails To Identify The Benefit

Allen Matkins on

In Dirks v. SEC, 463 U.S. 646 (1983), the United States Supreme Court found that a tippee may be liable for trading on the basis of material, nonpublic information if he or she knows that the tipper disclosed inside...more

WilmerHale

Insider Trading Prohibition Act Passed by the House of Representatives

WilmerHale on

Last week, a large, bipartisan majority of the US House of Representatives passed a bill that would explicitly codify a ban on insider trading, with 410 votes in favor of the bill and 13 against (12 Republicans and one...more

WilmerHale

Insider Trading Law Alert: Better The Devil You Know? Tipping Liability, Martoma and the Rise of 18 U.S.C. § 1348

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Insider trading has frequently been splashed across headlines in recent months, with a congressman, an NFL player, a comedy writer, and a Silicon Valley executive all facing charges. In the background of these headlines are...more

Bass, Berry & Sims PLC

Chris Lazarini Analyzes Second Appeal to Vacate Insider Trading Conviction

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Bass, Berry & Sims attorney Chris Lazarini analyzed a defendant’s second appeal to vacate an insider trading conviction. On the direct appeal, the individual raised multiple evidentiary issues, but did not challenge the jury...more

BCLP

New SDNY Case Illustrates Broad Reach of Prosecutors’ Power to Pursue Insider Trading Claims Despite Personal Benefit Requirement

BCLP on

A decision last week from the U.S. District Court for the Southern District of New York illustrates the broad reach of prosecutors and regulators in pursuing recipients of insider trading tips, despite the case-law...more

Proskauer - Corporate Defense and Disputes

Insider Trading for Dummies: Judge Rakoff Tries to Simplify the Law

A lot of ink has been spilled over the crime of insider trading, which – in the view of U.S. District Judge Jed Rakoff – “is a straightforward concept that some courts have managed to complicate.” In his recent decision in...more

Sheppard Mullin Richter & Hampton LLP

Hello, Newman. A Second Circuit Panel Revives U.S. v. Newman’s Personal Benefit Test, Maybe.

On June 25, 2018, the Second Circuit Court of Appeals issued a revised opinion in United States v. Martoma, No. 14-3599, Dkt No. 226. (2d Cir. Jun. 25, 2018) (“Martoma”). While the outcome for Matthew Martoma does not...more

BakerHostetler

Newman Appears to Narrowly Survive the Second Circuit's Rehearing of Martoma

BakerHostetler on

On June 25, 2018, a divided panel of the United States Court of Appeals for the Second Circuit reaffirmed the insider trading conviction of a hedge fund portfolio manager in United States v. Martoma on different grounds from...more

A&O Shearman

Second Circuit Amends Martoma And Reaffirms, But Arguably Still Weakens, Newman's "Meaningfully Close Personal Relationship" Test...

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On June 25, 2018, a divided three-judge panel of the Second Circuit amended its decision in United States v. Martoma. We previously reported on the facts of Martoma and the panel’s original decision, which held that the...more

Proskauer Rose LLP

Second Circuit Again Holds That Tipper/Tippee Liability Can Arise from a Gift of Inside Information Even Without a Close Personal...

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The Second Circuit confirmed this week that a "meaningfully close personal relationship" is not required for insider-trading liability where a tipper discloses inside information as a gift with the intent to benefit the...more

BCLP

Securities and Corporate Governance Update – November 2017

BCLP on

Planning for the 2018 Proxy Season - There are number of important considerations that public companies should be aware of as they begin preparing for the 2018 proxy season, including potential changes in law, pay ratio...more

Jones Day

Second Circuit Court of Appeals Expands Insider Trading Liability

Jones Day on

On August 23, 2017, the Second Circuit Court of Appeals affirmed the insider trading conviction of Matthew Martoma, a former portfolio manager for SAC Capital Advisors LLP ("SAC Capital"). In doing so, the court overturned...more

BakerHostetler

Second Circuit Majority in U.S. v. Martoma Eliminates Proof of Financial or Other Personal Benefits to Tipper for Conviction

BakerHostetler on

On Aug. 23, 2017, the United States Court of Appeals for the Second Circuit issued a split decision in United States v. Martoma, upholding a portfolio manager’s insider trading conviction and finding that a tippee need not...more

Seyfarth Shaw LLP

A New and Important Development in Insider Trading Law

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In a case likely to have ongoing ramifications, the Second Circuit recently upheld the conviction of Matthew Martoma, a former portfolio manager for Stephen Cohen’s SAC Capital. In so doing, the court clarified, at least for...more

Latham & Watkins LLP

Divided Second Circuit Broadens Personal Benefit Test for Insider Trading Liability

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The court’s Martoma decision reinvigorates the US government’s ability to prosecute insider trading cases. Key Points: - The majority opinion overrules recent case law requiring that an insider have a meaningfully close...more

A&O Shearman

Divided Second Circuit Panel Abandons Relationship Test From Landmark Newman Decision In Upholding Insider Trading Conviction

A&O Shearman on

On August 23, 2017, a divided three-judge panel of the United States Court of Appeals for the Second Circuit upheld the insider trading conviction of SAC Capital Advisors, LLC (“SAC”) portfolio manager Mathew Martoma. United...more

Miller Canfield

Second Circuit Broadens 'Personal Benefits' Triggering Insider Trading Liability

Miller Canfield on

As noted in our December 9, 2016, Client Alert, the Supreme Court in Salman v. U.S. ruled that the required “personal benefit” to the person disclosing inside information (the tipper) does not need to be “pecuniary” or...more

Carlton Fields

Second Circuit Martoma Ruling, Affirming Tippee’s Conviction, Backtracks on Newman, and Adds Yet More Uncertainty to Ever-Evolving...

Carlton Fields on

Last week's dueling Second Circuit opinions in United States v. Martoma – Chief Judge Katzman’s 37-page majority opinion and Judge Pooler vigorous 44-page dissent – once again transformed insider trading law. In the aftermath...more

Katten Muchin Rosenman LLP

Bridging the Week - August 2017 #4

Former Portfolio Manager’s Conviction for Insider Trading Upheld by Federal Appeals Court Despite Same Court’s Prior Contrary Reasoning: Last week, a three-judge panel of the federal appeals court in New York upheld the...more

Kilpatrick

Second Circuit Clarifies its Post-Salman Position, Affirms Insider Trading Conviction

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On August 23rd, the Second Circuit issued its much-anticipated opinion in U.S. v. Martoma, affirming the 2014 insider trading conviction of S.A.C. Capital Advisors portfolio manager Matthew Martoma. In doing so, it clarified...more

BCLP

Second Circuit Reverses Itself on Insider Trading

BCLP on

Stock traders who thought they could trade freely on gifts of inside information so long as the givers were not their close friends should rethink their strategy. The U.S. Court of Appeals for the Second Circuit this week...more

Patterson Belknap Webb & Tyler LLP

Newman’s “Meaningfully Close Personal Relationship” Requirement No Longer Good Law

A divided Second Circuit panel (Katzmann, Pooler (dissenting), Chin) on Wednesday upheld the insider trading conviction of former SAC Capital portfolio manager Mathew Martoma. Confronting its precedent in United States v....more

Morgan Lewis

The Martoma Decision: The Second Circuit Tackles Insider Trading Post-Salman

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The decision could alter the landscape of tipping liability. The US Court of Appeals for the Second Circuit issued another landmark insider trading opinion on August 23. In United States v. Martoma, the Second Circuit...more

Burr & Forman

Martoma: Second Circuit Abrogates Newman, Broadens Dirks

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A Second Circuit Panel held that the Supreme Court’s Salman decision abrogated the Circuit’s Newman requirement of a “close personal relationship” under the “gift theory” of insider-trading; the dissent claims the Panel...more

Allen Matkins

Did The Co-Founder Of Alcoholics Anonymous Violate Rule 10b-5?

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Recently, I enjoyed watching My Name is Bill W., a 1989 movie that starred James Woods, JoBeth Williams and James Garner. The film tells the story of Alcoholics Anonymous co-founder William Griffith Wilson (aka Bill W.). In...more

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