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Plan B? Feds Pursue Insider Trading Charges Under SOX

Bruce Carton | August 26, 2015

Earlier this month, a federal jury in Atlanta acquitted hedge fund manager Steven Slawson on all 34 counts he faced as the "tippee" in an alleged insider trading scheme. While the case made headlines briefly because of the rarity of an acquittal in a criminal insider trading case, a potentially more notable aspect of the case was flagged this week by Professor Peter J. Henning in his White Collar Watch column in the NYT's DealBook.

Henning observed that federal prosecutors in Slawson pursued their insider trading case not under Section 10(b) of the Securities Exchange Act of 1934 -- which is the norm -- but rather under a far more obscure securities fraud statute. Prosecutors alleged that Slawson violated 18 U.S.C. § 1348, a provision of the...
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