Court overturns insider trading convictions

Judges narrow definition of insider trading and say prosecutors took too broad a view in Wall Street crackdown

A federal appeals court dealt the Justice Department a significant defeat Wednesday, overturning two insider trading convictions and potentially constraining prosecutors’ latitude to pursue such crimes.

A three-judge panel of the Second US Circuit Court of Appeals narrowed the definition of what constitutes insider trading and determined prosecutors had taken too broad a view of the law in their multiyear crackdown on Wall Street.

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