A few years ago, some wise judges asked themselves, “Does insider-trading mean what people think it means?” (Actually, they were asked the question by a couple of hedge fund managers, but they were asked the question all the same.) And they decided it did not: Insider trading meant substantially less than it was widely understood to mean, especially by Preet Bharara, if it in fact meant anything at all anymore. This led to a frenzy of further semantic discussions, mostly on the part of people in jail for insider trading who no longer wanted to be, and the prosecutors who put them there.
Then, almost exactly two years later, the U.S. Supreme Court weighed in and said those judges in New York weren’t so wise and learned after all, and that insider-trading still very much exists, and it doesn’t take all that much to be guilty of it. And yet the Talmudic argument about what is and isn’t insider-trading continues, in the very same courthouse where the debate got started all those years ago.
He said Blaszczak’s “network of friends was his secret sauce,” while Deerfield was “in it for the money” and Worrall hoped his tips would land him a lucrative private sector job.
Now, all of that sure does sound like the sort of that counts as insider information these days, especially when one of Blaszczak’s clients is telling one of his successors that if he’s not getting inside dope he is “going to suck” at his job. But it is not so simple according to some people.
But in his opening statement, Blaszczak’s lawyer David Patton said there were “zero allegations” anyone was paid for tips, and that “there was no secret mole inside” CMS, whose information was “constantly” shared outside the agency….
John Nathanson, a lawyer for Worrall, said much information his client had been accused of leaking was public, and denied there was any quid pro quo.
Of course, there’s nothing in the recent insider-trading decisions that says any of those things is required for something to constitute insider trading, but who knows? Maybe the next federal judge to consider the meaning of those two words will decide that they are.