Insider Trading Prosecutions Moving West?

With the announcement yesterday that the US Attorney’s Office in SDNY is dropping its prosecutions of seven individuals charged with insider trading (, look for the US Attorney’s Offices in LA, SF, and the rest of the west to pick up where SDNY left off. While the Second Circuit adopted the heightened evidentiary standards that led to the landmark decision – including a decision to drop cases against individuals who had already pleaded guilty – the Ninth Circuit has specifically declined to adopt those standards. Check out the Salman decision ( for a very different take on the issue, and read SDNY Judge Jed Rakoff – sitting by designation but writing for the court – give the Newman decision the back of his hand. Now that the Supreme Court has refused to resolve the circuit split, and while we wait for Congress to put a lid on this mess and define the crime of insider trading once and for all (, expect the Department of Justice to move its prosecutions west into those districts covered by the Ninth Circuit.