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 information about an impending acquisition of the target. The decision in United States v. Chow held that:

• The nondisclosure agreement (“NDA”) between the transaction parties created a duty to keep information about the potential transaction confidential and not to use it for any purpose other than the transaction;
• The defendant tipper violated that agreement by providing information to the tippee, who purchased significant amounts of the target’s shares before the transaction was announced;
• The evidence supported the jury’s finding that the tipper had intentionally provided material, nonpublic information (“MNPI”) to the tippee; and
• The tipper had received a sufficient personal benefit in exchange for providing MNPI.