The Second Circuit yesterday affirmed the insider trading conviction of the principal of a potential acquiror who, in breach of a nondisclosure agreement with a potential target company, had provided a tippee with nonpublic...more
The Second Circuit held earlier this week that the criminal statute proscribing securities fraud permits convictions for insider trading without proof that the provider of material, nonpublic information received a personal...more
1/2/2020
/ Breach of Duty ,
Centers for Medicare & Medicaid Services (CMS) ,
Confidential Information ,
Duty of Trust ,
Enforcement Actions ,
EU Market Abuse Regulation (EU MAR) ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Rule 10(b) ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Wire Fraud
Since the Second Circuit’s 2014 decision in United States v. Newman triggered a debate about the personal benefit requirement, several bills have been introduced in Congress to define insider trading. The most recent effort...more
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
12/12/2018
/ Breach of Duty ,
Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Illegal Tipping ,
Insider Trading ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
Chapter 2:
Insider Trading: Focus on Subtle and Complex Issues -
Many hedge funds routinely face insider trading concerns as they trade equity or debt. Sometimes these issues are fairly obvious, such as where the fund...more
8/16/2018
/ Breach of Duty ,
Confidential Information ,
Dodd-Frank ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
Securities Violations ,
Tippees ,
Tippers ,
White Collar Crimes
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
6/29/2018
/ Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Martoma ,
Non-Public Information ,
Personal Benefit ,
Quid Pro Quo ,
Securities Litigation ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
The Second Circuit ruled today that a “meaningfully close personal relationship” is not required for insider-trading liability where a tipper discloses inside information as a gift or in exchange for some other type of...more
In what appears to be the first appellate decision since the Supreme Court’s December 2016 ruling in Salman v. United States, the U.S. Court of Appeals for the First Circuit affirmed an insider-trading conviction based on a...more
2/27/2017
/ Acquisition Agreements ,
Confidential Information ,
Confidentiality Agreements ,
Criminal Convictions ,
Dirks v SEC ,
Financial Institutions ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Personal Benefit ,
Public Information ,
Securities Violations ,
Stocks ,
Tippees ,
US v Salman
The Supreme Court confirmed today that the "personal benefit" required to establish a claim for insider trading can consist of making a gift of material, nonpublic information to a family member or friend and that an exchange...more
12/7/2016
/ Confidential Information ,
Dirks v SEC ,
Fiduciary Duty ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman
U.S. District Judge Jed Rakoff denied motions for judgment as a matter of law or for a new trial after a jury found the defendants civilly liable for insider trading. The decision in SEC v. Payton (S.D.N.Y. Nov. 29, 2016)...more
All eyes were on the U.S. Supreme Court yesterday as it heard arguments in Salman v. United States (No. 15-628) concerning the “personal benefit” required to establish a claim for insider trading. After an hour punctuated by...more
On July 26, 2016, the U.S. Court of Appeals for the First Circuit affirmed another conviction in a pair of appeals arising from insider-trading prosecutions. The decision in United States v. McPhail confirms that, under...more
7/28/2016
/ Appeals ,
Convictions ,
Criminal Prosecution ,
Illegal Tipping ,
Insider Trading ,
Jury Instructions ,
Kickbacks ,
Material Nonpublic Information ,
Mens Rea ,
Misappropriation ,
Personal Benefit ,
Rule 10b-5
On May 26, 2016, the U.S. Court of Appeals for the First Circuit held that friends’ gifts of wine, steak dinners, and other luxury items can constitute the types of personal benefit needed to establish a breach of duty in...more
5/27/2016
/ Breach of Duty ,
Confidential Information ,
Criminal Prosecution ,
Fiduciary Duty ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Mens Rea ,
Misappropriation ,
Personal Benefit ,
Scienter ,
Securities and Exchange Commission (SEC) ,
US v Newman ,
US v Salman
The Second Circuit last week affirmed the conviction of a former corporate executive on charges of insider trading. The court’s unpublished decision on January 14 in United States v. Riley held that the Government had...more
On January 19, 2016, the Supreme Court agreed to review the Court of Appeals for the Ninth Circuit's decision concerning the "personal benefit" required to establish a claim for insider trading. The grant of certiorari in...more
On October 5, 2015, the Supreme Court refused to grant review of the Second Circuit’s restrictive insider-trading decision in United States v. Newman. The Government, through the Solicitor General, had asked the Supreme...more
After months of will-he-or-won’t-he speculation about whether the U.S. Solicitor General would ask the Supreme Court to review the Second Circuit’s restrictive insider-trading decision in United States v. Newman, the question...more
The U.S. Court of Appeals for the Ninth Circuit appears to have rebuffed aspects of the Second Circuit's recent effort to narrow liability for insider trading. The Ninth Circuit's decision today in United States v. Salman...more
Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman. On May 12, 2015, a federal District Court in Massachusetts...more
U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC. The court held that the SEC’s complaint had...more
The Second Circuit today denied the request by the U.S. Attorney’s office for the Southern District of New York for panel or en banc rehearing of the landmark U.S. v. Newman decision, which overturned insider-trading...more
Yesterday, U.S. District Judge Andrew L. Carter, Jr. rejected the argument by the U.S. Attorney’s Office for the Southern District of New York to limit the Second Circuit’s decision in United States v. Newman to classical...more
1/26/2015
/ Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Mergers ,
Misappropriation ,
Personal Benefit ,
Portfolio Managers ,
Publicly-Traded Companies ,
Securities ,
Securities Fraud ,
US v Newman
The U.S. Government filed a petition seeking panel and en banc rehearing of the Second Circuit’s December 2014 decision in United States v. Newman and Chiasson, ___ F.3d ___, 2014 WL 6911278 (2d Cir. Dec. 10, 2014). That...more
1/26/2015
/ En Banc Review ,
Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Petition For Rehearing ,
Portfolio Managers ,
Securities ,
Securities Fraud ,
US v Newman