Richards Kibbe & Orbe LLP founding partner Lee Richards was quoted in Bloomberg BNA's article "Does Dismissal Signal Death Knell for Insider Trading Cases?" Last week, the U.S. Attorneys Office dismissed its case against former SAC Capital Advisors LP fund manager Michael Steinberg and dropped charges against six other cooperators. This comes as a result of the United States v. Newman insider trading case, in which the Second Circuit held that the "tippee" must be aware that the "tipper" disclosed the non-public information in exchange for "personal benefit" of consequence.
"The U.S. Attorneys Office did the right thing, in my view," Mr. Richards said. What effects will Newman have on civil cases brought by the SEC? According to Mr. Richards, "We can expect the SEC to test the limits of what counts as an intangible ‘benefit’ in insider trading cases, where the criminal authorities will be more conservative and very careful to articulate only intangible benefits which are a clear and substantial quid pro quo for tipping inside information."