Shapiro, Arato & Isserles Wins Second Circuit Acquittal of Insider Trading Conviction

On December 10, 2014, the United States Court of Appeals for the Second Circuit reversed the criminal conviction of our client, Anthony Chiasson, and held that he and his co-defendant had not committed a crime. The government had charged Mr. Chiasson with insider trading based on information that he received fourth- or fifth-hand. In reversing his conviction, the Court held that a tippee cannot be criminally liable for trading on material nonpublic information unless he knew that a corporate insider had disclosed that information for a personal benefit, and that the district court failed to instruct the jury on this element of the crime. The Court also held that the government’s evidence of the insiders’ alleged personal benefits, and of whether Mr. Chiasson knew of those supposed benefits as a remote tippee, was insufficient. As a result, the Court directed that the indictment be dismissed with prejudice.

Notably, the Court’s opinion cited three prior precedents that partner Alexandra Shapiro argued and won in the Second Circuit, including two other cases in which, as here, the Court of Appeals held that an acquittal was warranted due to insufficient evidence. See United States v. Cassese, 428 F.3d 92 (2d Cir. 2005) (insider trading conviction not supported by sufficient evidence); United States v. Coplan, 703 F.3d 46 (2d Cir. 2012) (directing judgments of acquittal of attorney on fraud charges related to Ernst & Young tax shelters); United States v. Kaiser, 609 F.3d 556 (2d Cir. 2010) (reversing securities fraud conviction and remanding for new trial).

Alexandra Shapiro, Daniel J. O’Neill and Jeremy Licht co-authored the briefs, together with Mark F. Pomerantz and Gregory Morvillo.

The opinion in United States v. Chiasson can be found here.

Copies of the briefs can be found here and here.

Selected news coverage of the decision can be found below: