Blaszczak vacated

Gibson Dunn, Supreme Court Vacates Second Circuit Ruling Expanding Insider Trading Liability

If the Second Circuit concludes that, after Kelly, confidential government information does not constitute property, the Court could reverse the convictions on this ground while leaving unaddressed its prior holding that there is no personal benefit requirement in Title 18 insider trader cases. As the petitioners warned the Supreme Court, prosecutors in this scenario would likely treat this silence as a green light to continue to charge insider-trading crimes where there is little to no evidence of a personal benefit to the tipper, or tippee knowledge of that benefit. Of course, under such circumstances, prosecutors would not have the benefit of Blaszczak to rely on, and thus there could be litigation risk to the government depending on the facts of the particular case.

United States v. Blaszczak, 2019 U.S. App. LEXIS 38662, 2019 WL 7289753 (2d Cir. Dec. 30, 2019)

Davis Polk & Wardwell LLP, Second Circuit Lowers the Bar for Charging Criminal Insider Trading (Jan. 7, 2020)

The court held that the “personal benefit” test for insider trading established by the Supreme Court in Dirks v. SEC does not apply to wire and securities fraud under Title 18 of the U.S. Code. Additionally, the court held that confidential government information constitutes “property” for the purposes of federal fraud statutes. The ruling will make it easier for the government to prosecute insider trading even when there is no clear benefit to the source who provided the information. (footnote omitted)

via TheCorporateCounsel.net, GD&C, S&C, Milbank, Akin Gump, WF&G, Andrew Vollmer, Alison Frankel, John C. Coffee Jr.

Insider Trading Prohibition Act

　Insider Trading Prohibition Actなる法律が米国の連邦下院を通過したらしいです。この手の法律は、散発的に提案されるので、気に留めていなかったのですが、下院の投票が410対13という情報を得て、少し調べてみました。govtrack.usによると法律として成立する可能性は、1%程度のようです。一応、調べた範囲内で有用だと思ったリンクを纏めておきます。

　改正法案の内容は、既存の判例法理を基礎にしたものなので、ある程度意図を理解できるのですが、細かい点で既存の判例法理との差異がありそうです。印象としては、判例法理よりも禁止の幅が広いように思えます。どうでしょうか。

The Call for a Statutory Insider Trading Law

Orrick, The Call for a Statutory Insider Trading Law (March 7, 2017)

Judge Jed S. Rakoff (S.D.N.Y.) recently made headlines after urging lawyers to draft and advocate for a more straightforward insider trading statute to replace judicially-created insider trading law. During his keynote speech at the New York City Bar’s annual Securities Litigation & Enforcement Institute, Judge Rakoff explained that the law has become overly-complicated since courts were forced to define insider trading by shoehorning the concept into the fraud provisions of the Securities Exchange Act of 1934. As a result, increasingly suspect theories have been developed to address potential insider trading in an expanding variety of scenarios.