Ex-Galleon trader seeks to void insider trading conviction

Thu Jan 22, 2015 3:59pm EST
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By Jonathan Stempel

NEW YORK Jan 22 (Reuters) - A former Galleon Group hedge fund trader on Thursday said he will ask a federal judge to throw out his conviction and 10-year prison sentence, one of the longest imposed in a broad U.S. government probe into insider trading.

In court papers, Zvi Goffer, 38, said the jury instructions at his trial were tainted, leading to his June 2011 conviction.

He said a reversal was justified in light of last month's decision by a federal appeals court in New York that curbed prosecutors' ability to bring insider trading cases.

In that Dec. 10 decision, the 2nd U.S. Circuit Court of Appeals said a trader, to be convicted of insider trading, needed to know the original source of a tip had received a "personal benefit" in exchange for that information.

The court said U.S. District Judge Richard Sullivan set too low a bar when instructing jurors who convicted hedge fund traders Todd Newman and Anthony Chiasson of insider trading, requiring that their convictions be reversed.

Sullivan also handled Goffer's trial.

"Goffer's trial was tainted unconstitutionally because the jury was never required to find the touchstone element of the crime," the defendant's knowledge of "the personal benefit motive of the original tipper," Goffer's lawyer Yale Klat wrote.

Goffer wants to be freed on bail while his conviction is reviewed. The 2nd Circuit and the U.S. Supreme Court previously rejected other arguments he raised to void his conviction.   Continued...