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Last week saw two significant developments for insider trading law stemming from the Second Circuit’s important decision in U.S. v. Newman, 773 F.3d 438 (2d Cir. 2014). First, the government was dealt a significant loss when, on Jan. 22, 2015, U.S. District Judge Andrew L. Carter, Jr. vacated four insider trading defendants’ guilty pleas in the wake of Newman and rejected the government’s argument that the Newman decision does not apply to cases prosecuted under the so-called “misappropriation” theory of…
In its highly anticipated decision in U.S. v. Newman, the U.S. Court of Appeals for the Second Circuit held on Dec. 10 that to sustain insider trading charges against a tippee who trades on material nonpublic information, the government must prove that the tippee knew that the tipper disclosed the information in breach of a duty of trust and confidence in order to receive a personal benefit. The court further explained that the benefit must be…