United States:
Lessons For Hedge Fund Managers From The Government's Failed Prosecution Of Alleged Insider Trading Under Wire And Securities Fraud Laws
16 August 2016
McDermott Will & Emery
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The Supreme Court stated clearly in Chiarella v. United
States that the mere fact that a person receives material
nonpublic information and then executes a trade based on that
information does not constitute a crime. But judicial intervention
has not stopped the government from trying to come up with novel
theories by which to prosecute so-called "remote tippees"
– recipients of information several steps removed from the
corporate insiders at the beginning of the chain – for
insider trading.
This article discusses the government's unsuccessful trial
and prosecution of client Steven E. Slawson and the wire and
securities fraud statutes upon which it was based, analyzing the
ramifications of the case for hedge fund managers.
Lessons for Hedge Fund Managers From the Government's Failed
Prosecution of Alleged Insider Trading Under Wire and Securities
Fraud Laws
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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