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Hello Newman! (and Chiasson): Second Circuit Decision Raises the Bar for Government to Prove Liability of “Remote Tippees” in Insider Trading Cases

Written by Brian P. Keane

In a groundbreaking decision, the United States Court of Appeals for the Second Circuit has reversed the 2013 insider trading convictions of Todd Newman and Anthony Chiasson. The decision in United States v. Newman, No. 13-1837 (2d Cir. Dec. 10, 2014), significantly raises the bar for the government’s burden of proof in “remote tippee” insider trading cases. The investment community (as well as government prosecutors) have been eagerly awaiting this decision since oral arguments were heard by the Second Circuit in April 2014. Nearly eight months later, the decision handed down has dealt a severe blow to the government’s efforts to push the envelope in prosecuting individuals who trade on inside information but have one or more “layers” between them and the “insider” who initially disclosed the tip (the “tipper”).  To read more, click here.

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Chip Phinney