On August 17th, the Second Circuit affirmed the conviction of Joseph Contorinis, a co-portfolio manager of the Jeffries Paragon Fund, on charges of insider trading and conspiracy to commit securities fraud. The Court holds that the trial court properly instructed the jury on the definition of material, nonpublic information. A tip that provides additional reliability to existing information about the status of a transaction based on the source's access to inside information may be material. The trial court also acted within its discretion in admitting evidence concerning the trades by other individuals. The evidence of common trades had arguable probative value in support of the contention that defendant received insider information. The Court, however, concludes that the trial court erred in ordering appellant to forfeit gains acquired by his employer. Defendant cannot be ordered to forfeit profits that he never received or possessed. U.S. v. Contorinis.
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Portfolio manager's insider trading conviction is affirmed
- Winston & Strawn LLP
- August 20 2012
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