Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information.

In September of 2015, SEC ALJ Patil held for Ruggieri, finding that two of the six accused trades were independently justified and the other four lacked proof of tipper-benefit (applying Newman).  See T. Potter, SEC’s Home Court Loss Undermines DOJ’s Newman Argument, Law360 (Sept. 17, 2015) and here.

The Enforcement Staff sought Commission review, which was granted in December 2015, discussed here.

Commissioner Stein thought the Staff’s circumstantial evidence was sufficient.  Commissioner Piwowar believed the Staff’s evidence of continuing telephone contact, incomplete statistical analysis of trading activity, and other circumstantial evidence was ambiguous at best, so didn’t carry the Staff’s burden.

The Opinion leaves in place the ALJ’s Newman-based dismissal, even though the US Supreme Court in the meantime rejected Newman’s tangible-benefit rationale in its Salman v. United States, 580 U.S. _____ (Dec. 6, 2016)( No. 15-628).

The Order and Opinions are here.

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