Accused inside trader, freed from prison, seeks to void conviction

Thu Mar 12, 2015 4:45pm EDT
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By Jonathan Stempel

NEW YORK, March 12 (Reuters) - A former trader and lawyer who spent 20 months in prison after turning down an offer of probation has asked a federal judge to throw out his conviction for insider trading, joining others to cite a recent U.S. court decision narrowing the definition of that offense.

Michael Kimelman, 44, in a Thursday court filing called himself the victim of a "clear and fundamental miscarriage of justice," and said he is "actually innocent" of the charges for which he was convicted in June 2011, in a trial before U.S. District Judge Richard Sullivan in Manhattan.

Kimelman's request came three months after a federal appeals court in New York on Dec. 10 said insider trading required knowledge that insiders who passed confidential tips did so in exchange for personal benefits of some consequence.

The ruling overturned the convictions of hedge fund managers Todd Newman and Anthony Chiasson, whose trial was also overseen by Sullivan. The appeals court said Sullivan instructed jurors incorrectly on the law.

"We believe strongly in Mike's innocence and are hopeful that the Newman decision will finally enable him to be vindicated," Kimelman's lawyer Alexandra Shapiro said.

Jennifer Queliz, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan, declined to comment.

Kimelman was convicted in June 2011 for his involvement in an alleged insider trading ring including the brothers Zvi and Emanuel Goffer over trades in companies such as 3Com Corp and Axcan Pharma Inc.

That came one month after Kimelman rejected prosecutors' offer of probation, if he would plead guilty only to conspiracy.   Continued...