Why Insider Benefit Is Irrelevant To Criminal Insider Trading
On May 19 Law360 published an article co-authored by David Chaiken and Paul Monnin of Paul Hastings LLP. The article explores why, despite abundant commentary and litigation over the personal benefit element in insider trading cases since the Second Circuit’s landmark Newman decision in December 2014, this debate is arguably moot in criminal cases due to the availability of alternative charges; namely, DOJ’s ability to prosecute criminal insider trading cases under Title 18, U.S. Code, Sections 1341, 1343, and 1348. David and Paul provide examples to illustrate the flexibility these statutes give federal prosecutors, and address why it is important for practitioners to include an analysis of these alternative charges in advising clients caught in the regulatory crosshairs, and for public companies and broker-dealers to ensure that their insider trading and confidentiality policies are broad enough to cover these statutes and not just the traditional framework under Exchange Act Section 10(b) and SEC Rule 10b-5.