New York judge plans to toss 4 guilty pleas in insider-trading case after appeals court ruling

MarketsAssociated Press

A judge says he's leaning toward tossing out four guilty pleas in a New York insider-trading case, the latest fallout from a recent appeals court ruling criticizing prosecutors' tactics.

Federal Judge Andrew L. Carter Jr. notified attorneys of his plans Thursday. He says he thinks it's necessary to reject the pleas after a federal appeals court in Manhattan two weeks ago reversed two insider-trading convictions.

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The appeals court ruling stemmed from a government crackdown on hedge fund insider trading.

The judge says the 2nd U.S. Circuit Court of Appeals defined insider trading in a way that no longer supports the guilty pleas in a case involving five friends. The men were charged with conspiring in 2009 to earn hundreds of thousands of dollars by trading on a secret about IBM's planned acquisition of a software company.