Archive | jury instructions

Friday, August 25th, 2017

Second Circuit Relaxes “Personal Benefit” Requirement for Insider Trading Offenses

This week, in United States v. Martoma, the Circuit held that a “meaningfully close personal relationship” does not need to exist between an insider and a tippee in order to establish an insider trading violation under a “gift theory” of liability. The Circuit reached this conclusion on the ground that the Supreme Court abrogated the holding of United States v. Newman, 773 F.3d 438 (2d Cir. 2014), and thereby relaxed the “personal benefit” requirement necessary to support an insider trading conviction. You can access the Martoma opinion here.

Martoma was convicted of insider trading in violation of 15 U.S.C. §§ 78(b) & 78ff for trading on material, nonpublic information that he received from a neurologist concerning the results of a clinical drug trial. To establish an insider trading violation in this context, the government must prove that the insider stood to personally benefit, “directly or indirectly, from his …


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Categories: insider trading, jury instructions, securities law

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Friday, May 20th, 2016

Second Circuit Updates – May 20, 2016

There were three summary orders from the Second Circuit. Of particular interest is the Court’s order in United States v. Choudhry, No. 15-1737-cr. There a panel of the Second Circuit (Newman, Cabranes, Lohier, Jr.) addressed, among other issues, whether jury instructions regarding the charge of transmission of a threat to injure were erroneous in light of the Supreme Court’s decision in Elonis v. United States, 135 S. Ct. 2001 (2015). As I’ve written about here before, and as this case demonstrates, courts are still struggling with the boundaries of Elonis.

The District Court in Choudhry gave the following instruction:

“[a] statement is a threat if it was made under such circumstances that a reasonable person hearing or reading the statement [who] was familiar with the context of the threat would interpret it as a threat of injury.”

But, as the Second Circuit noted, in Elonis, …


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Categories: jury instructions, plain error

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