As previously reported, the Newman decision caused turmoil in the world of insider trading and the fallout continues. Earlier this month, prosecutors told a federal judge in Manhattan that Newman had invalidated the guilty plea for insider trading of John Johnson, former Wyoming Retirement System CIO, because the admissions he had made in 2013 were now insufficient to support the plea. Prosecutors were planning to prosecute if Johnson did not enter a new plea that would suffice under Newman. Meanwhile, Congress has weighed in with three proposed bills that would statutorily define insider trading and eliminate the requirement under Newman that:
- the tippee know both that the tipper breached a duty of confidentiality and
- the tipper received a personal benefit of “some consequence.”