Appeals Court Overturns Major Insider Trading Convictions

In throwing out the U.S. government’s insider trading lawsuit against two former hedge fund traders, a three-judge panel for the Second Circuit Court of Appeals has shifted the burden of what prosecutors must prove in such cases. The decision calls into question at least one other insider trading conviction by Preet Bharara, the U.S. attorney in Manhattan, and is likely to hobble his further attempts to go after insider trading.  Bharara said in a statement, “Today’s decision by the Court of Appeals interprets the securities laws in a way that will limit the ability to prosecute people who trade on leaked inside information.”