On June 3, the SEC agreed to return $6 million forfeited by Diamondback Capital, LLC as a result of a non-prosecution agreement pursuant to an insider trading investigation.  This decision by the SEC comes on the heels of the Second Circuit’s decision in Newman, where the court overturned the insider-trading convictions of two Level Global Investors and LP cofounders because the prosecutors did not show that the tippers received a significant benefit for their tips, which were traded on, and that the traders (the two defendants) were similarly unaware of any benefit exchanged for that information.  Judge Scheindlin vacated the SEC’s civil case after Diamondback’s counsel argued that conduct underlying the charges in the case was the same as was ultimately found lawful in NewmanUnited States v. $6,000,000.00 in United States Currency, 12-cv-6023 (S.D.N.Y.); SEC v. Adondakis, 12-cv-409 (S.D.N.Y.).

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