Attorneys Say 'Martoma' Does Little to Settle Insider Trading Concerns
The Second Circuit's split decision in an insider trading case 'United States v. Martoma' was a clear win for attorneys at the DOJ and SEC. But it may not put to rest uncertainty over the nature of relationships that may create liability under securities law.
August 25, 2017 at 06:03 PM
23 minute read
The U.S. Court of Appeals for the Second Circuit's split decision in an insider trading case United States v. Martoma, 14â€3599 was a clear win for attorneys at the U.S. Department of Justice and U.S. Securities and Exchange Commission. But it may not put to rest uncertainty over the nature of relationships that may create liability under securities law.
After the circuit's previous narrowing of the kinds of relationships that must be proven to sustain charges in United States v. Newman and the uncertainty of how Newman would apply in the wake of the U.S. Supreme Court's decision last year in United States v. Salman, the Martoma decision restored to prosecutors some of the power they feared gone after Newman.
“I think the majority is trying to go back to [United States v.] Dirks, and look at personal benefit and define it, indirectly, a little bit more broadly,” said Wilmer Cutler Pickering Hale and Dorr partner Lori Echavarria.
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