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U.S. prosecutors and regulators have made their first push into policing alleged insider trading in digital assets, with two cases brought in May and October 2022. In May, federal prosecutors announced criminal charges in the “first ever digital asset insider trading scheme” in U.S. v. Chastain; and in October they trumpeted criminal charges in the “first ever cryptocurrency insider trading tipping scheme” in U.S. v. Wahi. In the latter case, the SEC also brought civil insider trading charges in SEC v. Wahi.
Register and hear from Allen & Overy LLP partner Eugene Ingoglia, who prosecuted insider trading cases as an Assistant U.S. Attorney in the Southern District of New York, including the trial of Mathew Martoma in the largest-dollar insider trading scheme prosecuted to date, and who as a defense attorney has defended clients in recent insider trading investigations and trials, and actively represents clients in the digital assets space. Mr. Ingoglia will address questions around the current state of the law, how the government has chosen to charge the digital asset cases, what we can expect to see moving forward, and how the government’s theory relates to the novel theory it advanced in the Blazszack case, in which he represents one of the appellants.
Questions that will be addressed include:
- Why did the government charge the criminal cases as violations of the wire fraud statute and not as a violation of the securities laws? (5 minutes)
- What was the digital asset involved in the Chastain case? What did the government allege was the confidential information? What was the alleged scheme? (10 minutes)
- What was the theory of the defense motion to dismiss in the Chastain case? How did the court rule on the defense motion? What are the implications for the case going forward? (10 minutes)
- What was the defense motion to strike the words “insider trading” all about? How did the court resolve that motion? Is the Chastain case an insider trading case? (10 minutes)
- Why the SEC charged violations of the securities laws in the Wahi case, while the criminal authorities charged wire fraud and not securities fraud? (10 minutes)
- What are the digital assets charged as part of the criminal case, and which of those were charged in the SEC case? What are the implications of the SEC’s allegations about those particular digital assets? (10 minutes)
- What are the implications of the Second Circuit’s December 2022 dismissal of all substantive counts in U.S. v. Blaszczak on future insider trading prosecutions in the digital assets space? (5 minutes)
Program Level: Update
Advanced Preparation: None