This post was written by Amy J. Greer.
The verdict is in – finally. Guilty on all counts. We’ll have more on that later, as will many people, no doubt.
But for those who wondered what took the Rajaratnam jury so long, I think it’s worth a reminder that, while the evidence in the case might seem somewhat straightforward – at least the juicy tidbits reported in the media, plus all those seemingly useful guilty pleas – insider trading law is definitely not.
Bottom line, there is no US law that says: “thou shalt not trade on material non-public information we all wish we had”; instead, we have Section 10 of the Securities Exchange Act of 1934 and Rule 10b-5 , which proscribe fraud far more broadly.
From these very broad pronouncements have come a patchwork of legal decisions that comprise US insider trading law and which require a fact finder – the Raj jury – to make at least six separate factual findings: that the defendant (1) intentionally (2) purchased or sold a security (3) on the basis of (4) material (5) non-public information (6) in breach of a duty of trust or confidence.
Whew. That’s a lot of work. And it’s worth remembering that most of these elements likely played a role in how the evidence was presented at the trial. Oh yeah – and there’s also that “beyond a reasonable doubt thing” that’s required for a finding of guilt in a criminal trial.
Most of us never have to face the question of whether a jury of our peers will do that hard work. At some level – at every level really – it’s good to know they do. Even in those cases where it seems so straightforward.