Insider trading and the Supreme Court

Via NYT comes comment on a future Supreme Court case:

There are longstanding differences between Boston and New York, like the rivalry between the Red Sox and the Yankees. Adding a new one, the federal appeals courts in each city have taken different approaches to the type of benefit a tipper must receive in exchange for inside information to make trading on it a violation of the securities laws.

The Supreme Court will decide what type of benefit must be provided to prove a quid pro quo arrangement, and it could take insider trading law in a new direction.

You need to read the whole thing to get a sense of how these cases are pursued.

Lifted from an e-mail is Beverly Mann’s response to my query:

In a way, this reminds me of the issue the Court decided to decide in in the Bob McDonnell case, about whether what the McDonnells performed in exchange for all the loans and gifts their buddy gave them was official action rather than just helping out a constituent.

This isn’t my area of expertise, by any stretch, though, and that Dealbook article is really thorough. I remember the uproar when the Second Circuit reversed the conviction in the Newman case, discussed in the article, and the Court decision in the case they’ll hear next term definitely will be important. Most of the justices are sympathetic to these kinds of white collar criminal defendants, I think, and so I would expect a reversal of the conviction, but how they will change the law in order to do it is anyone’s guess, judging from the article.