The U.S. Court of Appeals for the Second Circuit’s split decision in an insider trading case United States v. Martoma, 14‐3599 was a clear win for attorneys at the U.S. Department of Justice and U.S. Securities and Exchange Commission. But it may not put to rest uncertainty over the nature of relationships that may create liability under securities law.
After the circuit’s previous narrowing of the kinds of relationships that must be proven to sustain charges in United States v. Newman and the uncertainty of how Newman would apply in the wake of the U.S. Supreme Court’s decision last year in United States v. Salman, the Martoma decision restored to prosecutors some of the power they feared gone after Newman.
