Bloomberg Law: Second Circuit Expands Scope of Insider-Trading Liability

February 21, 2020

O’Melveny partner Anton Metlitsky and counsel Kendall Turner authored this Bloomberg Law article, which discusses the Second Circuit’s decision to expand the scope of insider-trading liability and potential consequences of the ruling.

“A recent decision by the U.S. Court of Appeals for the Second Circuit may overhaul the way insider-trading cases are charged and litigated,” Metlitsky and Turner wrote.” The decision substantially expands the scope of insider-trade liability in tipping cases. Indeed, if the Second Circuit’s decision stands—and the wire fraud statute and the Sarbanes-Oxley Act’s securities fraud provision are read to allow conviction for a tipping offense without proof of the traditional elements of a tipping offense, including a personal benefit—it will have several significant consequences.”