Corporate Defense and Disputes

Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds

Tag Archives: US v. Newman

New York Court Upholds Insider-Trading Verdict

U.S. District Judge Jed Rakoff denied motions for judgment as a matter of law or for a new trial after a jury found the defendants civilly liable for insider trading. The decision in SEC v. Payton (S.D.N.Y. Nov. 29, 2016) held that the jury had sufficient evidence to conclude that the initial tipper of inside information had … Continue Reading

Wine, Steak, and Massage Parlors Are Personal Benefits for Insider Trading

The U.S. Court of Appeals for the First Circuit held yesterday that friends’ gifts of wine, steak dinners, and other luxury items can constitute the types of personal benefit needed to establish a breach of duty in connection with a prosecution for insider trading. The court’s May 26, 2016 decision in United States v. Parigian also … Continue Reading

Key Takeaways from SEC/DOJ Enforcement Panel

Last week, representatives of the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) participated in Sandpiper Partners LLC’s Annual SEC/DOJ Enforcement 2016 Panel at the Metropolitan Club. Participants included: Stephanie Avakian (Deputy Director, Division of Enforcement, SEC), Nicole Friedlander (Chief, Complex Frauds and Cybercrime Unit, U.S. Attorney’s Office, Southern District … Continue Reading

Second Circuit Rejects Riley Appeal over Personal-Benefit Standard for Insider Trading

The Second Circuit last week affirmed the conviction of a former corporate executive on charges of insider trading.  The court’s unpublished decision on January 14 in United States v. Riley held that the Government had adduced sufficient evidence that the defendant had received a personal benefit – in the form of investment advice – in exchange … Continue Reading

Supreme Court Denies Review of Second Circuit Insider-Trading Case

The Supreme Court today refused to grant review of the Second Circuit’s restrictive insider-trading decision in United States v. Newman.  The Government, through the Solicitor General, had asked the Supreme Court to clarify the nature of the “personal benefit” that a tipper must receive in order to create liability for insider trading.  But the Supreme … Continue Reading

Government Seeks Supreme Court Review In Second Circuit Insider-Trading Case

After months of will-he-or-won’t-he speculation about whether the U.S. Solicitor General would ask the Supreme Court to review the Second Circuit’s restrictive insider-trading decision in United States v. Newman, the question has now been answered. The Government filed a certiorari petition on July 30, 2015 asking the Supreme Court to clarify the nature of the “personal … Continue Reading

9th Circuit’s Insider-Trading Decision in US v. Salman

The U.S. Court of Appeals for the Ninth Circuit appears to have rebuffed aspects of the Second Circuit’s recent effort to narrow liability for insider trading. The Ninth Circuit’s decision today in United States v. Salman holds that insiders can engage in insider trading if they disclose material nonpublic information with the intent to benefit … Continue Reading

Another Insider-Trading Case Survives Newman Scrutiny

Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman.  On May 12, 2015, a federal District Court in Massachusetts declined to dismiss the indictments in United States v. McPhail and held that the Government had alleged sufficient facts showing … Continue Reading

Court Upholds SEC’s Insider-Trading Complaint and Questions Second Circuit’s Newman Decision

U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC.  The court held that the SEC’s complaint had adequately alleged that the tipper of material nonpublic information had received a personal benefit for the disclosure and … Continue Reading

Second Circuit Denies DOJ’s Request for En Banc Review of Newman; Leaves Landmark Insider Trading Decision in Place

The Second Circuit today denied the request by the U.S. Attorney’s office for the Southern District of New York for panel or en banc rehearing of the landmark U.S. v. Newman decision, which overturned insider-trading convictions of two remote tippees by (i) holding that a tippee must know that the insider tipper received a personal benefit … Continue Reading

Third Congressional Proposal to Define Insider Trading

On March 25, 2015, U.S. Representative Jim Himes introduced the Insider Trading Prohibition Act.  The bill is the latest in a series of efforts to define insider trading following the Second Circuit’s decision last year in United States v. Newman.  We have blogged previously about similar legislation introduced by U.S. Senators Jack Reed and Bob … Continue Reading

After Newman, Congress Seeks to Define Insider Trading

Ever since the U.S. Court of Appeals for the Second Circuit issued its landmark decision in United States v. Newman, debate has raged about whether the court has sanctioned insider trading or has appropriately restrained the Government’s efforts to prosecute innocent market conduct – and whether the judiciary, rather than Congress, should be defining and … Continue Reading

Proskauer Hedge Fund Seminar Recap: Fallout From the Second Circuit’s Insider-Trading Ruling

On Thursday, February 5, 2015, Ralph C . Ferrara, Robert J. Cleary and Jonathan E. Richman were invited to Proskauer’s Hedge Fund Breakfast Seminar to speak about the Second Circuit’s insider-trading ruling in Newman/Chaisson.  The litigators provided the group of hedge fund professionals with a helpful overview of insider-trading laws, followed by an interesting discussion … Continue Reading
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