And now for some good news for the wealthy folk with highly questionable morals and ethics. The 2nd U.S. Circuit Court of Appeals just made prosecuting insider trading more difficult. In United States v. Newman, 13-1837 (Dec. 10, 2014), the court held that to convict a person who traded on insider information -- a tippee -- the government must prove the the tippee KNEW THAT AN INSIDER DISCLOSED MATERIAL NONPUBLIC INFORMATION FOR PERSONAL BENEFIT. The opinion has two major implications for traders.... The first important implication for traders is that (in the 2nd Circuit, at least) a tippee who trades on inside information is not liable for insider trading unless she knows that the insider who disclosed the information received a personal benefit for doing so.... The second, and perhaps more important implication of Newman is that it appears to raise the bar for what constitutes a personal benefit. The above quote is from an article by Jason de Bretteville and Justin Bernstein titled Insider trading ruling will curtail regulatory authority that was published in the December 16, 2014 edition of the Los Angeles Daily Journal.
Posted on: Sun, 21 Dec 2014 19:41:31 +0000
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