Securities and Exchange Commission chief Mary Jo White is none too pleased about Wednesday’s landmark federal appeals court ruling that overturned two insider trading convictions.
“My initial sense is that it is an overly narrow view of the insider trading law, and that is a concern,” she said at a conference in New York on Thursday.
The stunning reversal of the convictions of former traders Todd Newman and Anthony Chiasson is widely believed to have a chilling effect on insider-trading cases going forward.
Near the top of her worry list is the SEC’s case against former hedge fund kingpin Steve Cohen, which is still unresolved and was stayed pending the court decision.
Cohen’s hedge fund SAC Capital pled guilty to insider trading because of the numerous convictions of its employees. It paid a $1.8 billion fine and turned itself into a family office.
Cohen escaped criminal liability, but the SEC charged him with “failure to supervise” and wants a lifetime ban against his return to the hedge fund business, which he is fighting.
At least one of the convictions of his former employees, Michael Steinberg, is expected to be overturned as a result of the ruling.