One year ago the Securities and Exchange Commission made headlines when it charged two Wall Street bankers with insider trading in credit default swaps. In bringing the case—the first-ever insider-trading enforcement action involving credit default swaps—the SEC sought to stake out new ground under the decade-old Gramm-Leach-Bliley Act.
Well, it failed.
On June 24, after presiding over a three-week bench trial, Judge John Koeltl of the Southern District of New York dismissed the case and exonerated the two defendants: Jon-Paul Rorech, a salesman at Deutsche Bank Securities, and Renato Negrin, a former portfolio manager at hedge ...