The U.S. appeals court is locate to hear the case whose outcome could make it harder for the government to act against insider trading and potentially exposed numerous high-profile guilty verdicts, including the SAC Capital Advisors' portfolio manager Mr. Michael Steinberg.
The question in front of the 2nd U.S. Circuit Court of Appeals in the New York on Tuesday is one that has separated lower court judges: whether to be offended of the insider trading, the recipient of the non-public information must know that the source of the tip benefited from the revelation.
The concerns are at the sympathy of the appeal brought by the Todd Newman, the former portfolio manager at the hedge fund Diamondback Capital Management, and the co-founder of the hedge fund Level Global Investors Mr. Anthony Chiasson.
Chiasson and Newman were convicted in the 2012 for their position in the scheme; prosecutors said collected the $72 million in illegal profits after trading on inside information about Nvidia Corp and Dell Inc.
The government said that the Chiasson, 49 and Newman, 46 traded on the instructions they received from the analysts who worked at their hedge funds. Chiasson has been sentenced to 6-1/2 year in prison as well as Newman faces 4-1/2 years in prison. Moreover, the both men have been released on bail during their appeal.
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