UPDATE 2-US seeks annulment of landmark insider trade ruling

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(Updates with criticism from Anthony Chiasson’s lawyer)

By Nate Raymond

NEW YORK Jan 23 (Reuters) – Federal prosecutors in New York
on Friday asked a U.S. appeals justice to recur a landmark
ruling that curtailed their ability to pursue insider trading
cases and jeopardized several convictions.

Prosecutors underneath Manhattan U.S. Attorney Preet Bharara
asked a 2nd U.S. Circuit Court of Appeals to extend a rehearing
in a box of sidestep account managers Todd Newman and Anthony
Chiasson, who in Dec won a annulment of their insider
trading convictions.

Prosecutors sought a rehearing by both a three-judge panel
that ruled for Newman and Chiasson as good as a full appeals
court, potentially 15 judges underneath a rules.

In their petition, prosecutors argued a preference broke
with U.S. Supreme Court fashion and “threatens a effective
enforcement of a bonds laws.”

Gregory Morvillo, Chiasson’s lawyer, pronounced he had “great
confidence in a opinion” and would wait a court’s response.
Newman’s counsel declined to comment.

The 2nd Circuit statute hold that prosecutors need to infer a
trader knew that a strange source of a tip perceived a benefit
in sell for a information.

It also narrowed what constitutes a benefit, observant it must
be of “some consequence” and can't be usually loyalty – a
holding prosecutors wrote would “dramatically limit” their
ability to pursue cases.

Prior to a ruling, Bharara’s bureau had cumulative 86
people’s philosophy for insider trade given Oct 2009. In
its wake, several defendants have sought to take advantage of
the preference in their possess cases.

On Thursday, U.S. District Judge Andrew Carter in Manhattan
threw out a guilty pleas of 4 group indicted of enchanting in
insider trade forward of IBM Corp’s 2009 merger of

Carter on Friday asked prosecutors to yield sum about
their justification as he considers either to boot a case

Newman, 50, and Chiasson, 41, were found guilty in 2012 for
their roles in a intrigue prosecutors pronounced reaped $72 million
through trade on inside information about mechanism builder Dell
Inc and chipmaker Nvidia Corp.

Prosecutors pronounced both group traded on tips they perceived from
analysts operative during their sidestep supports who belonged to a “corrupt
circle” of investment organisation analysts that traded non-public
information performed from employees during several companies.

Prior to winning a appeal, Newman, a former portfolio
manager during Diamondback Capital Management, and Chiasson,
co-founder of Level Global Investors, had been condemned to
4-1/2 years and 6-1/2 years in prison, respectively.

The box is U.S. v. Newman, 2nd U.S. Circuit Court of
Appeals, No. 13-1837.

(Reporting by Nate Raymond; Editing by Chris Reese and Lisa

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