The Globe and Mail reports in its Thursday edition U.S. federal Appeals Court dealt the Justice Department a significant
defeat Wednesday, overturning two insider-trading
convictions and potentially constraining
prosecutors' ability to pursue such crimes. A Wall Street Journal item inside The Globe says a three-judge panel of the Second
U.S. Circuit Court of Appeals
narrowed the definition of what
constitutes insider trading and
determined prosecutors had taken
too broad a view of the law in
their multiyear crackdown on
Wall Street. The ruling is a stinging
rebuke for the Manhattan U.S.
Attorney's Office, headed by Preet
Bharara, which had a near-perfect
record in insider-trading cases.
The ruling means the convictions of Todd Newman and
Anthony Chiasson are overturned.
Prosecutors are likely barred
from retrying Mr. Newman and
Mr. Chiasson because the court
dismissed their indictments with
prejudice. The Manhattan U.S.
Attorney's Office had planned to
retry the cases, according to people
familiar with the matter. "The decision affects only a subset
of our recent cases," said Mr. Bharara. There now could be grounds to overturn
the marquee conviction in the SAC Capital Advisors case.
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