In the last month or so, three cases brought by the U.S. Securities and Exchange Commission have ended in mixed jury verdicts. And while partial victories are better than losses, the agency must be wondering why it’s been unable to land knockout blows.
The latest mixed verdict came on Thursday in an insider trading case against Andrew Jacobs, a former executive at The Hershey Co., and his brother Leslie Jacobs. The SEC alleged that Andrew Jacobs tipped off Leslie Jacobs to French pharma giant Sanofi’s planned tender offer to acquire Chattem Inc., enabling Leslie Jacobs to make $50,000 by buying and later selling Sanofi stock. After a six-day trial, jurors found that the brothers aren’t liable under Section 10(b) of the Exchange Act, the main statute the SEC uses to combat insider trading. The jury did find liability under Section 14(e) of the Exchange Act, a more specific statute that prohibits insider trading in the context of tender offers.
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