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Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 2:37 pm
by Number Six
This goes to show how corrupt the appeals courts can be as they undermine the rule of law.

http://dealbook.nytimes.com/2014/12/10/ ... onvictions

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 2:57 pm
by Hyrion
Number Six wrote:This goes to show how corrupt the appeals courts can be


I assume you're refering to the case about the convictions of Todd Newman and Anthony Chiasson.

Article According to cnbc: http://www.cnbc.com/id/102249787

A claim of corruption is pretty serious and should be met with an equivalent of explanation and actual evidence. I don't have a subscription to the New York Times and as a result do not have knowledge of what evidence may have been presented in that article.

Perhaps you can elaborate on why you believe the appeals court is corrupt in this situation?

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 3:08 pm
by Pottapaug1938
I think that he forgot to include the "sarcasm on" smiley.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 3:50 pm
by Jeffrey
Based on reading the article, the appeals court did the right thing. The problem seems to the law is super lax.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 3:54 pm
by Number Six
Just read the comments on this decision by other readers, many people stated that appeals courts make backward decisions like this contrary to the collective will of punishing insider trading.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 4:02 pm
by JamesVincent
Number Six wrote:Just read the comments on this decision by other readers, many people stated that appeals courts make backward decisions like this contrary to the collective will of punishing insider trading.


Jeffrey wrote:Based on reading the article, the appeals court did the right thing. The problem seems to the law is super lax.


The Appeals court ruled on law, not the collective will. If the law is funky or not broad enough the court cannot change it, only note that, in their opinion, the law needs changed.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 4:42 pm
by Arthur Rubin
I've often thought that the "insider trading" laws were so badly written so that neither intent nor attempt at gain was required. Apparently, the court agreed that that was improper.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 5:47 pm
by Number Six
JamesVincent wrote:
Number Six wrote:Just read the comments on this decision by other readers, many people stated that appeals courts make backward decisions like this contrary to the collective will of punishing insider trading.


Jeffrey wrote:Based on reading the article, the appeals court did the right thing. The problem seems to the law is super lax.


The Appeals court ruled on law, not the collective will. If the law is funky or not broad enough the court cannot change it, only note that, in their opinion, the law needs changed.


The law relies on collective will for the greater good, it is not some theoretical and impractical construct. The only people backing this reversal are those with a bias to do so. Just read the reactions, thinking people will continue to pull out of stocks.

Just wait until they water down Dodd-Frank further: http://dealbook.nytimes.com/2014/12/09/ ... dget-bill/

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 5:53 pm
by rosvicl
Disagreeing with a court decision is different from having evidence that the court is corrupt.

If laws are too lax, that's something to take to the legislature. It's not as though Congress has created a set of perfect laws that the courts are then messing up. Sometimes courts even say "if you want X result, you need to change the law in this way," and the legislature does nothing. There are a lot of things I'm not happy about with the current Supreme Court; in some of those cases, Congress could have passed new legislation to fix those problems, and didn't. In others, it's governors and legislators who are using the dubious court rulings. There's nothing in the current rules about eminent domain that requires a municipality to take private property and hand it to a favored developer, for example.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Thu Dec 11, 2014 8:07 pm
by Hyrion
Number Six wrote:The only people backing this reversal are those with a bias to do so.

You are incorrect. I currently (based on what little I know of the case and ruling) back the decision and have no bias for said position. Such all-encompassing statements are usually very wrong.

I'm a Canadian whose only investment is in a company in Canada. I have no access to insider information in said company and do not want such access. Given the situation, the ruling, the US Laws surrounding the ruling, the companies and individuals involved - there is absolutely no relationship to me.

If you wish to use the term "bias" in it's broadest sense rather than in the sense of negative bias which is usually how it is applied - then my only bias is that I am an absolute firm believer in equal application of existing Law applied to everyone no matter what their position in Society is. However, in that broadest sense, you too have your own biases relative to the situation. So if a broadly defined bias is wrong, it also applies to yourself.

Is the currently Law badly written? According the media I've read, it does appear so. But the correct location to change the Law (other then Laws that present a Constitutional breach) is in talking to your political representation.... it's not the Courts. There are very sound reasons behind separation of powers. It is not within the Powers of the Courts to make Law.

Should the two be guilty of a financial crime?

Being completely unfamiliar with the case and evidence to support such a finding: My only position on the subject is "Innocent until proven guilty".

Re: Insider Trading Convictions Reversed on Appeal

Posted: Fri Dec 12, 2014 1:22 am
by Number Six
I'll leave to the lawyers, pro and con, it just seems to me that the cases were being thrown out on relatively small matters and that they were engaged in insider trading. Possibly the DA is over-zealous, I would just hate to see the other cases unravel.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Fri Dec 12, 2014 1:30 am
by Arthur Rubin
And people say the NY Times isn't "liberal". If it weren't for the names of the criminals defendants being the same, I would have thought that the NY Times and CNBC were talking about different cases entirely.

Re: Insider Trading Convictions Reversed on Appeal

Posted: Fri Dec 12, 2014 12:04 pm
by Jeffrey
it just seems to me that the cases were being thrown out on relatively small matters and that they were engaged in insider trading


Point #2. I agree it definitely was insider trading.

Point #1. The issue is explained in the articles:

the act of insider trading is not explicitly prohibited in a federal statute. In its place, a patchwork of legal opinions and regulations define the law...

in order to sustain a conviction for insider trading, the Government must prove beyond a reasonable doubt that the tippee knew that an insider disclosed confidential information and that he did so in exchange for a personal benefit


This seems to be purely the legislatures fault for making the requirements for a conviction so strict.

If I'm reading this right, you can have the hypothetical case of me operating a hedge fund. I get a tip from an employee that works at a publicly traded company saying next quarters numbers will be good. I buy a ton of stock, make a killing. But since I did not know that the employee was breaking a confidentiality agreement, I'm off the hook despite clearly making money off insider information. Or even if I know 100% that the information is confidential, as long as I don't know the person feeding me the information isn't doing it for a benefit, IE me paying him for it or him getting a benefit indirectly from my trade, it's not a crime.