Fortune

THE NEW LEGAL LIMBO

INSIDER TRADING HAS ALWAYS BEEN HARD TO PROVE, OR EVEN TO DEFINE. POST-NEWMAN, IT MAY BE TOUGHER THAN EVER TO PROSECUTE.
Newman (left) exits a court in New York City with his attorney after a hearing in May 2013.

THE RULING by the U.S. Court of Appeals for the Second Circuit, in December 2014, that overturned the conviction of hedge fund trader Todd Newman has roiled the legal landscape and demonstrated just how nonintuitive the definition of insider trading is.

In response, the office of Manhattan’s top prosecutor, Preet Bharara, has protested through legal filings—so far in vain—that the decision would “dramatically limit the government’s ability to prosecute some of the most common, culpable, and market-threatening forms of insider trading.”

Though Newman’s

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