The US Supreme Court has refused to hear an appeal in United States v. Newman and Chiasson, in which the Second Circuit overturned the convictions of two hedge fund managers on the basis that the insider tipper did not receive a sufficient personal benefit in exchange for the disclosure of material non-public information ("MNPI"). In particular, the Second Circuit held that this personal benefit had to be more than a "mere fact of friendship, particularly of a casual or social nature." Instead it had to be 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."
To read more about the decision and its likely effect from our team in New York, click here.
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