On June 9th, the Second Circuit held that the Securities Exchange Act's "other than" penalty provisions, section 21(d)(3), do not apply to insider trading cases. The Court reasoned that a defendant becomes subject to section 21A, the Exchange Act's insider trading penalty provisions, as soon as the defendant engages in insider trading, regardless of whether that activity ultimately ripened into profits or the avoidance of loss. Having become subject to the provisions of section 21A, a defendant cannot become subject to section 21(d)(3), which imposes penalties for securities frauds other than insider trading. The Court therefore vacated the civil penalties imposed under section 21(d)(3) against defendants whose two instances of insider trading netted no gains and avoided no losses. In a related Summary Order, the Court affirmed the orders of disgorgement and penalties imposed under section 21A for profits derived from insider trading. The fact that those profits were commingled with gains from legitimate trading did not change the outcome. SEC v. Rosenthal.