United States v. Teicher
United States Court of Appeals for the Second Circuit
987 F.2d 112 (1993)
Victor Teicher and his arbitrage firm, Victor Teicher & Co. L.P. (Teicher) (defendants) traded in the securities of companies prior to anticipated acquisitions or mergers. Ross Frankel (defendant) was a research analyst in Drexel Burnham Lambert Inc.’s arbitrage department. Teicher and Frankel received confidential nonpublic information from a lawyer at a large law firm, a trader at a brokerage firm, and an investment bank research analyst regarding possible corporate acquisitions and mergers. While in possession of this information, Teicher and Frankel traded in the stocks of companies that were the subject of takeover bids. Teicher and Frankel were convicted of securities fraud under the misappropriation theory of insider trading. On appeal, Teicher and Frankel argued that the district court erred in instructing the jury that it could convict Teicher and Frankel for trading while knowingly in the possession of material nonpublic information without evidence that the information was the actual cause of the trading.
Rule of Law
Holding and Reasoning (Altimari, J.)
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