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In Insider Trading Case Evidence of Failure to Report Profit was Admissible

Aug. 6, 2016, 6:44 p.m.

In an insider trading case the court found that the failure of the taxpayer to report the profits from the trades was inextricably intertwined with the insider trading evidence and was admissible at trial. Other evidence was deemed not inextricably intertwined and was not permitted.

U.S. v. Hatfield,  2010 U.S. Dist. Lexis 15210  (E.D. N.Y. 2010)

        In an insider trading case, the Court found that defendants' alleged false statements to NASDAQ were not inextricably intertwined with defendants' alleged false statements to other government entities as to permit such evidence to be introduced at trial.

        However, the Court did permit the introduction into evidence proof that the Defendant failed to pay taxes on the profits made allegedly from insider trading.

         The court agreed that this information was inextricably intertwined with the indictments non-tax charges.

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