Supreme Court refuses to review insider trading decision deemed a ‘roadmap for

The Manhattan appeals court ruled that Wall Streeters who received insider tips had to know that the tipper was compensated for the info – and that the compensation couldn’t be just friendship but had to be of “some effect”.

In a stunning rebuke to Bharara, those convictions were overturned last December as the three-judge appellate panel redefined insider trading.

The high court rejected the case without comment.

The so-called Newman decision could also upend a few other insider trading convictions, among the more than 85 that Bharara successfully obtained.

In a joint statement, Newman’s lawyers, Stephen Fishbein and John Nathanson, welcomed the court’s action, which they said came only “after years of government over-reaching, including baseless raids on hedge funds that led to hundreds of innocent employees losing their jobs”.

Bharara’s office and the U.S. Securities and Exchange Commission had previously asked the 2nd Circuit to reconsider the definition, only to be rebuffed in April.

The appeals court said the men were several levels removed from the original sources of the confidential information and that prosecutors didn’t prove beyond a reasonable doubt the defendants knew they were trading on inside tips. (Credit: Law360) The high court did not comment on the petition for a writ of certiorari from U.S. Solicitor General Donald Verrilli, but its…

The Supreme Court’s action could renew calls for Congress to pass legislation clearly spelling out what constitutes insider trading, a crime that largely had been left to the court and USA regulators to define.

The Supreme Court won’t hear an appeal from New York Rep. Charles Rangel seeking to overturn his 2010 censure for financial wrongdoing.

Among those who could benefit from the ruling is Michael Steinberg, a portfolio manager at SAC Capital sentenced to 3-1/2 years in prison after his 2013 conviction for engaging in the same alleged conspiracy as Newman and Chiasson.

“If you have a CEO who has access to material, non-published information about earnings or anything else of a very sensitive nature and decides he wants to tip a relative or a buddy or a crony, knowing that person is going to trade on it to the tune and profit of millions of dollars, we would have to think long and hard, given Newman, whether to prosecute a person like that”, Bharara said.