Now we know that much of Preet’s legal premise for all those prosecutions was pretty dubious as well. Looks like my assessment of Preet Bharar aka Uncle Tom was right on spot. That’s the conclusion handed down Wednesday by the Second Circuit US Court of Appeals, which said resoundingly and with prejudice (meaning a retrial isn’t likely) that Bharara brought a bogus case against two hedge-fund executives. The court overturned their convictions for insider trading and proved, finally, that sanity has returned to the judicial system when it comes to what is largely a victimless crime. The sanity will be felt in the days and weeks ahead. The bogus legal reasoning Bharara and his deputies used to convict Anthony Chiasson and Todd Newman was duplicated in many of the other 80 or so insider-trading wins Bharara has racked up during the past five or so years with barely a single loss. As odd it may sound, Bharara and his peeps successfully argued for years that traders didn’t really have to know the information they were trading on was the illegal variety; it was apparently good enough for Preet and many judges and juries that traders should have known — despite the notion of intent that’s the bedrock of American criminal law. It was also not a big deal to Preet & Co. that the offending traders didn’t really pay off their sources to obtain the illegal information. In Preetworld, criminals will share something as nebulous as friendship to get people to break the law and risk significant jail time by forking over insider secrets. Again, the appeals court — relying on common sense (and years of judicial precedent) — said that from now on the government will have to prove that payoffs occurred, because real criminals never work for free. It was pretty clear from the get-go that neither Newman nor Chiasson had any clue about where the information they were getting actually came from. (In the world of Wall Street, information often passes through several layers of sources.) Nor was there much evidence that the analysts who gave them the information had paid off their sources — even if the payoff was something as flimsy as “friendship.” Indeed, the court ruled the payoff has to be something of “consequence.” The big question is how could someone as savvy as Preet Bharara have erred so badly? It begins with Preet’s vaunting ambition. People close to him say one reason he pumped up the insider-trading cases with theatrical press conferences and midnight raids to arrest traders in their pajamas in full view of TV cameras was because he lusted for Eric Holder’s job as US attorney general. nypost/2014/12/11/preets-overreach-insider-trading-case-slapdown/
Posted on: Thu, 25 Dec 2014 12:06:02 +0000
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