Originally Posted by Reuters
Accused inside trader, freed from prison, seeks to void conviction
March 12, 2015, 5:01 PM EDT
A former trader who spent months in prison and turned down probation asked a judge to throw out his conviction for insider trading.
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.
In Thursday’s filing, Shapiro said the government presented “zero evidence” that Kimelman knew Zvi Goffer, the alleged center of the ring, might have been paying his sources for tips.
“Kimelman did not commit a crime, and he is actually innocent of the insider trading and conspiracy charges on which he was convicted,” Shapiro wrote.
Zvi Goffer, who is serving a 10-year prison term, has also cited the Newman decision in seeking to overturn his conviction.
Several other defendants of the more than 80 to plead guilty or be convicted in Bharara’s insider trading probe have also sought to be exonerated.
Kimelman was sentenced to 2-1/2 years in prison, but according to the Federal Bureau of Prisons spent 20 months there before being freed in August 2013.
