It is generally understood that it is unlawful to trade on nonpublic, market-moving information, or tips from someone with inside information—but what if the tip was not unlawful in the first place? When someone receives a...more
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
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
On January 11, 2021, the U.S. Supreme Court vacated the 2019 decision of the U.S. Court of Appeals for the Second Circuit in United States v. Blaszczak, which substantially broadened the scope of criminal insider trading...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
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
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
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
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
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
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
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
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
On May 24, 2017, the United States Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission (SEC) launched their latest criminal and civil salvos against prohibited insider trading by...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
The Supreme Court’s decision in Salman v. United States, 137 S.Ct. 420 (2016) is already having an effect on the appeals arising out of the insider trading convictions in the Southern District of New York. Shortly after...more
In December 2016, the U. S. Supreme Court announced its decision in the closely watched insider trading case Salman v. US, ruling that if someone leaks confidential information to a friend or family member with the goal of...more
In Salman v. United States, decided on December 6, 2016, the Supreme Court upheld a conviction for criminal violations of insider trading laws. The Court, however, declined to adopt the expansive theories of insider trading...more
January 2017 - The last several years have seen law enforcement and regulatory bodies sharpen their focus on trading activity in the securities and derivatives markets. This focus has coincided with the advent of new and...more
Insider Trading: Supreme Court Affirms Salman - Why it matters: On December 6, 2016 the Supreme Court decided Salman v. U.S., in which it upheld the petitioner’s insider trading conviction. The Court found its 1983...more
The United States Supreme Court recently rendered a decision in Salman1 resolving a circuit split over whether the government prosecuting an insider trading case must show that the person giving an insider tip received...more
Just in time for the annual season of work holiday parties and family gatherings, the United States Supreme Court unanimously confirmed that leaking material non-public information to a close relative who then trades in...more
In its first insider trading ruling in almost 20 years, the U.S. Supreme Court upheld a ruling by the 9th Circuit Court of Appeals that a person can be held criminally liable for passing inside information to a friend or...more
A recent Supreme Court decision provides new guidance in the area of insider trading liability without personal benefit, and resolves an existing split between the Ninth Circuit and Second Circuit Court of Appeals. In Salman...more
Perhaps the most serious charge that could be leveled against a reader of this blog is that of being engaged in or associated with “insider trading.” The allegation alone is enough to derail or end a promising career. ...more