Updated, 9:44 p.m. | The convictions had racked up in recent years, 85 people all told, as Manhattan prosecutors swept through Wall Street with what they described as clear-cut evidence of insider trading.
But on Wednesday, a federal appeals court upended the government’s campaign. And in the process, the court rewrote the insider trading playbook, imposing the greatest limits on prosecutors in a generation.
In a 28-page decision, the United States Court of Appeals for the Second Circuit in Manhattan overturned two of the government’s signature convictions, the case against the former hedge fund traders Todd Newman and Anthony Chiasson, who were tried together. Citing the trial judge’s “erroneous” instructions to jurors, the court not only reversed the convictions but threw out the case altogether.
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