UPDATE (October 5, 2015): SCOTUS "Denies" to hear Newman Chiasson Supreme Court case on insider trading.
In what will be the most under-reported news of the day, U.S. Attorney Preet Bharara's request to the U.S. Supreme Court for a review of the 2nd Circuit's decision that overturned the convictions of Todd Newman and Anthony Chiasson is unlikely. On Thursday, SCOTUS published its Granted and Noted List Cases For Argument In October Term 2015 and it does NOT list Newman-Chiasson. SCOTUS will also publish a list of "Denied" cases any day now and one can expect the insider trading case to appear there.
Attorney for Anthony Chiasson, Gregory Morvillo, issued the following statement:
“As has been the case for nearly five years, Anthony Chiasson's confidence in complete exoneration is unwavering irrespective of whether that occurs next week or next year. Among its other infirmities, the government's petition does not even challenge the main reason for Mr. Chiasson's acquittal which was a complete evidentiary failure on a crucial element, the knowledge of personal benefit.”
On December 10 of last year, both men had their convictions overturned on insider trading charges that had wrongly accused them of being part of an elaborate scheme to get confidential information from inside publicly traded companies
The issue now is what government prosecutors will do with the handful of analysts who have already pleaded guilty and cooperated against the now-cleared Newman and Chiasson. The evidence, the law and their own admission of guilt leaves the government with few options. Should the judge(s) allow the men to drop their guilty pleas? Will government prosecutors just ask judges for light sentences? We will see.
This case should not be viewed as a setback in enforcement of securities laws nor a blemish on the conviction record of U.S. Attorney Bharara, as the NY Times wrote back in December. Instead, the justice system worked by freeing two men who were wrongly targeted by an overzealous prosecution that used leaks to the press as much as they did the law to win a jury conviction. Had the 2nd Circuit not made the decision they did, these two men would now be serving prison terms of 54 and 78 months. That is probably a story you will only read here.
We will see what the future holds for Newman and Chiasson, who will forever be linked to one of the most noted insider trading cases in U.S. history. One can only hope that the public will see the wrong that was done by their prosecution and the financial industry will see the good that was done by defining where prosecutors should draw the line .... at least we can hope.
