Powers, Forman Analyze Newman Insider Trading Decision for Compliance Programs

Articles / July 14, 2015

Partner Marc Powers and Associate Jonathan Forman co-authored an article published in the June 2015 issue of NSCP Currents, a professional journal published by the National Society of Compliance Professionals. The article, “Applying Newman’s Personal Benefit Requirement to Insider Trading Compliance Programs,” analyzes the U.S. Court of Appeals for the Second Circuit’s insider trading decision in United States v. Newman. Powers, the national leader of BakerHostetler’s Hedge Fund Industry and Securities Litigation and Regulatory Enforcement practices, and Forman note that while the decision makes it more difficult for the government to be successful in prosecuting alleged remote tippees, both the DOJ and SEC continue to pursue insider trading cases as a high priority. In light of this, Powers and Forman suggest that hedge funds, investment banks, and other money managers “revisit their insider trading compliance programs to ensure they are consistent with Newman and the cases interpreting it.” To assist this process, Powers and Forman provide five takeaways from these decisions.

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