The justices let stand a decision by the federal appeals court in New York last year that threw out insider trading convictions of two high-profile hedge fund managers.
The 2nd U.S. Circuit Court of Appeals overturned the convictions of Anthony Chiasson of Manhattan and Todd Newman, of Needham, Mass., after finding they were too far removed from inside information to be prosecuted.
Prosecutors warned the ruling could hinder the government’s campaign to curb insider trading on Wall Street, a crackdown that has resulted in more than 80 arrests and 70 convictions over several years.
In overturning the convictions, the appeals court said prosecutors needed to show that the person disclosing the information received a clear benefit — something more than the nurturing of a friendship.
The appeals court also said the person being prosecuted had to know about the benefit. That issue wasn’t before the Supreme Court.