Faulting Evidence, Circuit Rejects Insider Trading Verdict
The convictions of former hedge fund portfolio managers Todd Newman and Anthony Chiasson have been reversed by the the Second Circuit, which said prosecutors failed to produce sufficient evidence to show that they had willfully engaged in either insider trading or an insider trading conspiracy or knew the sources of the insider information received a personal benefit.
December 11, 2014 at 04:18 PM
6 minute read
The insider trading convictions of former hedge fund portfolio managers Todd Newman and Anthony Chiasson were reversed Wednesday by the U.S. Court of Appeals for the Second Circuit.
A three-judge panel said that the government failed to produce sufficient evidence to show that Newman and Chiasson willfully engaged in either insider trading or an insider trading conspiracy or knew the sources of the insider information received a personal benefit. The court remanded the case with instructions to dismiss the indictment against them with prejudice.
Clarifying the law in reversing Southern District Judge Richard Sullivan (See Profile), Circuit Judges Ralph Winter (See Profile), Barrington Parker (See Profile) and Peter Hall (See Profile) said that, in order to convict on insider trading, “a jury must find that a tippee knew that the insider disclosed confidential information in exchange for a personal benefit.”
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