The SEC’s Jury Problem

The SEC is having trouble winning insider trading cases before juries. The latest examples were last week in Illinois and Texas. In Illinois the jury came down in favor of defendants Rex C. Steffes and his three sons, who were alleged to have pocketed $1 million based on insider knowledge of a pending acquisition, after just one day of deliberation. In the Texas case, the jury also cleared the defendants of insider trading charges, although it did find them liable on some accounting fraud charges. Barnes & Thornburg attorney Brian E. Casey sees a trend developing: “The SEC’s continued difficulty in getting a jury to adopt its insider trading theories,” he writes, “could present a challenge for one of the agency’s oft-stated highest priorities.”