Court overturned verdict for insider trading of 4 accused
2022.12.27 14:27
Court overturned verdict for insider trading of 4 accused
Budrigannews.com – The insider trading convictions of four defendants, including two former hedge fund partners, were overturned on Tuesday by a divided federal appeals court due to leaks from a U.S. healthcare agency regarding planned changes to Medicare reimbursement rates.
Theodore Huber and Robert Olan, former partners of Deerfield Management Co., Christopher Worrall, a former employee of the United States Centers for Medicare and Medicaid Services (CMS), and David Blaszczak, the founder of political consulting firm Precipio (NASDAQ:), were found not guilty of fraud and theft in a 2-1 decision by the 2nd U.S. Circuit Court of Appeals in Manhattan. Methods for the health
Following a 2020 Supreme Court decision that clarified when alleged misuse of property triggered federal fraud laws, the court agreed with prosecutors that the May 2018 convictions could not stand.
It also ordered additional proceedings and overturned the conspiracy convictions against Blaszczak, Huber, and Olan, stating that it was unclear whether jurors convicted them for actions the government no longer considered criminal.
In Manhattan, a spokesperson for U.S. Attorney Damian Williams declined to comment.
According to the prosecution, Worrall told Blaszczak about upcoming CMS decisions, including plans to reduce reimbursements for kidney dialysis and radiation cancer treatment, during a scheme that lasted from 2012 to 2014.
According to them, Blaszczak gave the information to Huber and Olan, who used it to trade healthcare stocks and make $7 million.
In 2019, the defendants’ convictions were upheld by the appeals court, but the Supreme Court ordered a reconsideration after ruling in the “Bridgegate” case.
In that case, the Supreme Court overturned the wire fraud convictions of two defendants for blocking access lanes to the George Washington Bridge in Fort Lee, New Jersey, as a retaliation for the Democratic mayor of that city’s refusal to support Republican Governor Chris Christie for reelection.
According to the court, the alleged scheme did not seek to acquire “property” as defined by the underlying fraud statute.
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The 2nd Circuit said, citing that decision, that the CMS information that was leaked was not that agency’s “property” or a “thing of value” to back up the fraud and theft claims.
