The Tenth Circuit recently held that the SEC's in-house judges are "inferior officers" hired in violation of Article II's Appointment Clauses, creating a split with the D.C. Circuit over the issue.
The Tenth Circuit held that the SEC's ALJs were (1) positions "established by law," with (2) "duties, salary, and means of appointment … specified by statute," and (3) "exercise significant discretion" in "carrying out important functions." Thus, they were similar to the special tax judges held inferior officers in Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991). See ...
A unanimous Supreme Court reaffirmed the "gifting" theory of insider trading under Dirks and rejected Newman "to the extent" it required more.
The Court's long-standing rule in Dirks v. SEC, 463 U.S. 646, 664 (1983) allows a jury to infer a tipper's personal benefit "where the tipper receives something of value in exchange for the tip or 'makes a fit of confidential information to a trading relative or friend.'"
Recently, the Second Circuit appeared to limit the "gifting" theory. In United States v. Newman, 773 F.3d 438, 452 (2nd Cir. 2014), cert. denied, 577 U.S. ___ (2015), the Court ...