[JURIST] The US Supreme Court [official website] on Monday rejected [order list, PDF] an appeal [text, PDF] by the US Department of Justice [official website] in the case of two former hedge fund traders whose insider trading convictions were overturned by a lower court in December. The traders, Todd Newman and Anthony Chiasson, were convicted in May 2013 on charges of “conspiracy to commit insider trading and insider trading in violation of 18 USC § 371 [text], sections 10(b) and 32 of the Securities Exchange Act of 1934 [text, PDF], SEC Rules 10b-5 and 10b5-2, and 18 USC § 2 [text].” The US Court of Appeals for the Second Circuit [official website] overturned [JURIST report] the convictions of the two former hedge fund traders in December of last year. Prosecutors stated that the decision could have a negative impact on the government’s campaign to curb insider trading on Wall Street. The Second Circuit had ruled that a person must have direct knowledge of the insider giving tips to be convicted of insider trading, a decision that the government called an “unprecedented ruling” [SCOTUSblog report] that conflicts with Supreme Court precedent.

Insider trading is an international concern among securities regulators. In July the US District Court for the Eastern District of Pennsylvania issued an indictment [JURIST report] against real estate agent Herbert Sudfeld for alleged insider trading, with charges including securities fraud, three counts of making false statements to the FBI, and aiding and abetting. In April the Supreme Court denied certiorari [JURIST report] in an appeal brought by Rajat Gupta, the former director of Goldman Sachs Group, Inc., for his 2012 insider trading conviction. In January the Supreme Court rejected another appeal [JURIST report] by Gupta, leaving in place a lifetime ban on serving as an officer or director of a public company that stems from the civil case against him by the Securities and Exchange Commission [official website].