As discussed here, in April 2015 the Second Circuit rejected the DOJ’s petition for a rehearing in the landmark U.S. v. Newman insider trading case that has caused so much disruption to both the DOJ and the SEC. Facing a looming August 3 deadline to appeal the Second Circuit’s opinion, the United States today filed a petition for a writ of certiorari with the U.S Supreme Court, asking that court to hear the case.
In its petition, the U.S. argued that the Second Circuit’s “unprecedented ruling” reinterpreted the Supreme Court’s prior decision in Dirks v. SEC that an an insider personally benefits when he “makes a gift of confidential information to a trading relative or friend.” Newman changed this standard dramatically, and erroneously, the U.S. argued, by instead requiring “proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.” The U.S. added that
