A precise definition, an absolute prohibition or something in between?
Two senior hedge fund managers slip out of their insider trading convictions because the government couldn’t prove they knew whether the corporate insiders who initially divulged the tips they ultimately traded on were paid off for doing so.
Who cares whether the original tipper got a quid pro quo?
Todd Newman and Anthony Chiasson –hedge fund portfolio managers whose 2008 convictions and prison sentences1 for insider trading were just vacated by the Second Circuit Court in New York — can thank a Wall Street insurance analyst by the name of Raymond Dirks for their new-found innocence and freedom.
Risks his $15 billion hedge fund to avoid a huge loss
They were SAC Capital’s largest equity positions when Stevie Cohen sold $700 million and shorted $260 million of Elan and Wyeth stock in July 2008, just before the two pharmaceutical companies announced disappointing results in the Phase II clinical trial of bapineuzumab, their jointly-developed Alzheimer’s drug.
Funds that use expert networks to provide their research analysts with specialized company and industry intelligence constantly face the risk that some of the information so obtained is both material and non-public and cannot therefore be used in trading.