Have you heard the phrase "prosecutors will decide"? It's often used by news stations when discussing a crime and its sentence. As John Oliver pointed out on one episode of his late night show, most people have heard this phrase before, but they have heard it so much that they forget what it means. Prosecutors have the power to decide whether and what to charge against someone. They also have the power to hold crucial evidence until the last minute. Because the evidence is withheld, the case will seem to be stacked against the charged. For this reason, many of the accused choose to plead guilty and try to plead for a lower sentence instead of risking receiving a life sentence in a trial.
Insider trading, or “ securities fraud ,” is prohibited by 18 U.S.C. § 1348 and 15 U.S.C. § 10(b) As the Supreme Court explained in Dirks v. SEC , someone engages in insider trading under §10(b) if they breach a fiduciary duty by disclosing material, nonpublic information in exchange for a personal benefit. However, the Second Circuit’s recent holding in United States v. Blaszczak rejected this personal benefit requirement, at least as it relates to § 1348. The result? The range of conduct that triggers criminal liability under § 1348 is far bigger than the range of conduct that triggers liability under § 10(b). Stated another way, Blaszczak makes it easier for federal prosecutors to go after Title 18 securities fraud because - unlike Title 15 securities fraud - they do no need to prove the existence of a personal benefit.
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