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2nd Cir. Won’t Reconsider Insider Trading Case

(CN) - The 2nd Circuit on Friday denied a request from Manhattan U.S. Attorney Prett Bharara to reconsider its ruling in December that dramatically narrowed the definition of insider trading.

That ruling freed Anthony Chiasson, who co-founded the hedge fund Level Global Investors, and Todd Newman, an ex-portfolio manager of Diamondback Capital Management, who were convicted two years ago of committing securities fraud.

Bharara's office declined to comment. He could ask the Supreme Court to review the case, but to do so, he would first need to seek permission from the U.S. solicitor general.

Currently, there is no federal law that specifically defines insider trading. In the absence of such a definition, courts and regulators have enjoyed a wide latitude in defining it for themselves, the result being a sometimes confusing morass of regulations and court rulings.

In dismissing the insider trading charges against Chiasson and Newman last December, the 2nd Circuit ruled the men needed to know that insiders at technology companies were improperly leaking confidential information to them to gain some personal benefit from their knowledge.

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