The Supreme Court showed little enthusiasm Wednesday for cutting back on the government’s power to prosecute people who profit from trading stocks based on inside information. This is deemed to be fraud, even though Congress has never passed a law to spell out the crime of insider trading. However, prosecutors must always prove the accused trader knew he was trading based on confidential information from an insider. Last year, the U.S. 2nd Circuit Court of Appeals overturned the insider trading conviction of several big Wall Street traders. A year ago, he had voiced doubts about insider trading cases because Congress had failed to clearly define the crime.

Source: Los Angeles Times October 05, 2016 21:26 UTC