News & Analysis as of

Illegal Tipping

SEC Charges Eight With Insider Trading

by Dorsey & Whitney LLP on

The difficulty with tipping chains is establishing that the key elements of insider trading were passed down the chain to those trading. In the second circuit’s Newman case, for example, the court remarked that it had never...more

Second Circuit Court of Appeals Expands Insider Trading Liability

by 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

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

by 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

A New and Important Development in Insider Trading Law

by Seyfarth Shaw LLP on

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

“It’s Complicated:” The Evolving Case Law on How Relationships Impact Insider Trading Liability

Last Wednesday, former SAC Capital Advisors manager Mathew Martoma lost a bid to overturn his 2014 insider trading conviction in the Second Circuit. United States v. Martoma, No. 14-3599, 2017 WL 3611518 (2d Cir. Aug. 23,...more

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

by Shearman & Sterling LLP 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

Second Circuit Broadens 'Personal Benefits' Triggering Insider Trading Liability

by 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

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

by 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

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

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

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

Second Circuit Reverses Itself on Insider Trading

by Bryan Cave 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

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

U.S. v. Martoma: The Second Circuit Reconsiders the Personal Benefit Rule in Insider Trading Cases and Announces the Partial...

• A divided 2nd Circuit holds that there is no requirement for a “meaningfully close personal relationship” between a tipper and tippee in order for the tipper to reap a personal benefit from the disclosure sufficient to give...more

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

by Morgan Lewis on

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

Martoma: Second Circuit Abrogates Newman, Broadens Dirks

by Burr & Forman on

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

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

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

Divided Second Circuit Panel Upholds Martoma Conviction, Ruling that Newman’s “Meaningfully Close Personal Relationship”...

In a highly anticipated decision, a divided Second Circuit panel (Katzmann, Pooler (dissenting), Chin) yesterday upheld the insider trading conviction of former SAC Capital portfolio manager Mathew Martoma, ruling that the...more

What Is The Value of Cooperation With the SEC?

by Dorsey & Whitney LLP on

The Commission has long encouraged firms and individuals to cooperate with its investigations based on the promise of consideration when the action is resolved. When the resolution is reached the agency may acknowledge the...more

Trading in Opaque Markets: Fraud, Materiality and Compliance

by Dorsey & Whitney LLP on

This is the first segment of an occasional series regarding a group of criminal and civil securities fraud actions involving trading in opaque markets and the lessons that can be drawn the prosecutions Introduction -...more

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

by Allen Matkins on

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

Split Commission Can't Reverse Insider-Trading Dismissal

by Burr & Forman on

Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information....more

Insider Trading: Five Reminders From the SEC Division of Enforcement

A recent litigation release from the SEC Division of Enforcement, though seemingly unremarkable, highlights five basic principles that sometimes slip off a company’s insider trading compliance radar. ...more

Government Leaks Lead to Landmark Insider Trading Case

On May 24, 2017, the SEC for the first time brought charges based on allegations of insider trading on confidential government information. The alleged insider trading scheme involved tips related to three announcements by...more

MMT finds against SFC in insider dealing case

by Hogan Lovells on

In another decision against the SFC, the Market Misconduct Tribunal ("MMT") has found Mr Cheng Chak Ngok ("Mr Cheng"), former executive director, chief financial officer and company secretary of ENN Energy Holdings Limited,...more

Will 2017 Be the Year of Insider Trading Reform?

by McGuireWoods LLP on

For several years running, insider trading has been among the most high-profile enforcement priorities for both DOJ and the SEC. Unlike most federal criminal law, insider trading remains undefined by statute, having instead...more

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