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The U.S. Supreme Court has really heard quite enough about what is and is not insider trading, and it does not intend to hear anything more. That said, it doesn’t mind forcing the Second Circuit Court of Appeals, which has heard even more bickering over the matter than the high court and has shown itself to be somewhat confused on the matter, to listen to it some more.

The Supreme Court said the 2nd U.S. Circuit Court of Appeals should review its 2019 decision holding that non-public information from the U.S. Centers for Medicare and Medicaid Services (CMS) was property under a federal securities fraud statute, in light of the high court’s ruling last year in the “Bridgegate” case limiting how prosecutors can use property fraud statutes to go after government-related schemes.

To review, a bit more than six years ago, the said Second Circuit said that insider-trading, if it exists at all, does not exist as much as prosecutors like to think, and certainly not as much as Preet Bharara would wish. At the time, the Supreme Court steered clear of that debate, but after two years of reflection ruled that, yup, it definitely did exist, and was nearly as broad as we all thought before the Second Circuit opened this phase of the epistemological debate.

Then last year, the Supremes said that Chris Christie & co. were certainly corrupt when they decided to snarl traffic on the George Washington Bridge as political payback, but that they weren’t breaking the specific law in question, because the opening and closing of lanes to a river crossing couldn’t exactly be called government property. This got a couple of hedge fund managers thinking, “Hey, what about those tips we bought from that ‘political intelligence’ guy who, in turn, got them from his buddy at the CMS?” Maybe those are just intangible enough to fall foul of the Bridgegate limitations? And it seems they are, even if John Roberts & co. have decided to delegate the telling of that to those involved to Foley Square.

Speaking of things that Supreme Court doesn’t want to hear any more about, here’s the fate of the latest challenge to the SEC’s use of in-house judges.

The U.S. Supreme Court today denied a petition for writ of certiorari in the case of NCLA client Christopher Gibson…. SEC’s scheme fails to follow two controlling Supreme Court decisions….

But, crucially and unfortunately for Gibson, not the one it issued yesterday.

Supreme Court orders 2nd Circ to revist hedge fund insider trading case [Reuters]
No Supreme Court Look for SEC In-House Judge Challenge Process [Bloomberg Law]
U.S. Supreme Court Will Not Hear Case Challenging Removal Protections for SEC’s In-House Judges [press release]


Quit hiding behind the bench. By Phil Roeder (Flickr: Supreme Court of the United States) [CC BY 2.0], via Wikimedia Commons

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