A couple of months ago, we asked: “What happens if the Supreme Court defines insider-trading an Nino Scalia isn’t there to vote on it?” Yesterday, we got our answer: Nothing. Status quo ante. Not exactly the fireworks one hopes for from the Supremes’ once-in-two-decades consideration of the matter.
Although the government appeared likely to win the case at hand, involving business tips traded between two brothers, the justices struggled to find an appropriate test for prosecutors to use when bringing cases involving more casual relationships.
One thing was perfectly clear, however: The post-Scalia Supreme Court rump didn’t like any of the ideas the lawyers were throwing around. The government’s position—that something is insider trading when it says so—didn’t go very far, nor did the soon-to-be-imprisoned defendant’s argument that it’s only insider trading if the guilty party is really obvious about it.
“I’m not sure that your solution is going to clarify much of this area,” Justice Sonia Sotomayor said to a Justice Department lawyer arguing on behalf of the government. “It’s kind of a hazy line to draw, isn’t it?” Chief Justice John Roberts asked Deputy Solicitor General Michael Dreeben.
"You're asking us essentially to change the rules in a way that threatens that integrity," Kagan said.
And no one on the high court wants to do anything like that, as it might produce another unseemly 4-4 tie. If only they could go back and undo what they’d done before Scalia croaked and just not take up this silly case at all.
"I'm not worried so much about this case," Justice Stephen Breyer said.
Supreme Court Appears Skeptical of Radically Altering Insider-Trading Rules [WSJ]
U.S. top court leans toward making insider trading prosecutions easier [Reuters]
The Supreme Court Plays Goldilocks on Insider Trading [DealBook]