A federal judge must now consider a decade old case regarding insider trading in a mutual fund, Courthouse News'
Joseph Celentino reports.
When the SEC
charged Heartland Advisors
] and several of its personnel with insider trading, all the defendants except one,Jilaine Bauer
, entered into settlement agreements.
worked as Heartland's
general counsel and chief compliance officer. On insider trading, the SEC
won summary judgement against her and dismissed the other charges.
Celentino reports that the 7th Circuit remanded the case for further proceedings. In a 38-page opinion, the court declared that Bauer
is entitled to a trial on the question of whether the categories of public information she had access to were "material" for the purposes of the insider trading statute.
U.S. District Judge James Zagel said the case was unusual, according to Celentino, who quotes him as saying, "It is one of few instances in which the SEC
has brought insider trading claims in connection with a mutual fund redemption. No federal court has opined the applicability of insider trading prohibitions to the trade of mutual fund shares."
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