Prosecutors in Sweeping Insider Case Still Mulling Appeal

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Almost six months after a U.S. appeals court made it harder for the government to win insider-trading cases, federal prosecutors said they are still deciding whether to ask the U.S. Supreme Court to hear an appeal.

“The government is still considering whether to petition” the Supreme Court, Assistant U.S. Attorney Harry Chernoff told a judge in a separate insider case in a letter made public on Tuesday.

The U.S. Court of Appeals on Dec. 10 overturned the convictions of two former hedge fund managers, setting forth new rules for prosecuting insider cases. The court said the government must show that defendants in insider cases knew the source of an illegal tip and that the source received some benefit in exchange for it.

The appeals court on April 3 refused to reconsider the case.

The appeals-court case is U.S. v. Newman, 13-1917, U.S. Court of Appeals for the Second Circuit (Manhattan). The other case is U.S. v. Nguyen, 12-cr-00495, U.S. District Court, Southern District of New York (Manhattan).

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