Supreme Court’s Denial of Cert in Newman Favors Insider Trading Defense (Part One of Two)

Based on the Supreme Court’s October 5, 2015, denial of certiorari, the Second Circuit’s ruling in U.S. v. Newman – a decision widely considered to make insider trading convictions more difficult for the government to prove – remains intact.  Against a host of successful insider trading prosecutions by the Department of Justice, the Second Circuit’s decision in Newman was a sudden, and perhaps unexpected, development that severely limited the government’s ability to pursue insider trading charges in many instances.  In a guest article, the first in a two-part series, Dechert partners Robert J. Jossen and Michael J. Gilbert analyze the Newman decision and the government’s unsuccessful certiorari petition.  In the second article in the series, the authors will discuss a recent Ninth Circuit decision the government asserts conflicts with Newman and assess the problems that lie ahead for insider trading investigations and prosecutions in a post-Newman world. For insight from Jossen, see “For Hedge Fund Managers in a Heightened Enforcement Environment, Internal Investigations Can Help Prevent or Mitigate Criminal and Civil Charges,” Hedge Fund Law Report, Vol. 2, No. 47 (Nov. 25, 2009).   For more from Gilbert, see “Dechert Partners and Venor Capital General Counsel Describe the Scope of Supervisory Liability for Hedge Fund Manager Personnel,” Hedge Fund Law Report, Vol. 7, No. 26 (Jul. 11, 2014).  The Hedge Fund Law Report and Dechert will be co-sponsoring a panel on fundraising and marketing in Europe, focusing on the role of the general counsel and chief compliance officer, to be held in London on November 17, 2015.  For more information contact

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