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Second Circuit — Insider Trading: United States v. Jiau

U.S. Court of Appeals for the Second Circuit

Insider Trading

Non-Pecuniary Benefits — Recorded Telephone Conversations

United States v. Jiau
Judges Kearse, Walker and Chin

Background: The defendant appealed her conviction for conspiracy and insider trading arguing that the evidence of a phone conversation with an alleged co-conspirator was admitted in error. She also argued that the evidence was insufficient to prove the tippers had benefited from the conspiracy.

Ruling: The Second Circuit affirmed. The court held that the telephone conversations recorded in the ordinary course of business were admissible. Further, the non-pecuniary benefits conferred upon the tippers were sufficient to prove that the tippers had personally benefited from the insider trading conspiracy. Specifically, the tippers received meals at restaurants and gifts, as well as insider information about other stocks.

Randa D. Maher for the appellant; David I. Miller, United States attorney, for the appellee