United States v. Newman
United States Court of Appeals for the Second Circuit
773 F.3d 438 (2014)
Financial analysts obtained non-public information from corporate insiders they knew as family friends, casual acquaintances, or business-school alumni; with one exception involving mutual career-advice sharing, the insiders received nothing in return for their disclosures. Fund managers Todd Newman and Anthony Chiasson (defendants), several levels removed from the disclosing insiders, received and traded on this inside information. The district court instructed the jury only that the defendants had to know the insiders disclosed material, nonpublic information, without requiring proof they knew the insiders received a personal benefit in exchange; the jury convicted both defendants.
Whether the government must prove, to sustain a tippee's conviction for insider trading, that the tippee knew the insider disclosed confidential information in exchange for a personal benefit.