Failure To Prove "Personal Benefit" Sinks SEC

The Newman effect has led to another dismissal, this time from the SEC's own administrative court. On September 14, 2015, an administrative judge of the U.S. Securities and Exchange Commission (the "SEC") dismissed an administrative proceeding related to allegations of insider trading. The insider trading allegations were made against a former Wells Fargo trader, Joseph Ruggieri. The proceeding was dismissed as against Ruggieri on the grounds that the SEC Division of Enforcement ("the Division") failed to prove that the confidential information he received from a junior analyst at Wells Fargo, Gregory Bolan was exchanged for a personal benefit as required pursuant to the meaning of personal benefit established in Dirks v. SEC and United States v. Newman. Dirks and Newman confirm that to establish insider trading, the prosecution must prove beyond a reasonable doubt that the tipper breached a fiduciary duty by disclosing non-public material information to the tippee for