Second Circuit Affirms Conviction In “Expert Network” Insider Trading Case

Posted On Thursday, January 10, 2013
By: John A. Schwab

On January 8, 2012, the Second Circuit affirmed the conviction of James Fleishman, formerly a salesperson for Primary Global Research, in an appeal arising from the Southern District of New York.  United States v. Fleishman, No. 12-94-CR (2d Cir. Jan. 8, 2012).  In 2011, Fleishman was convicted and sentenced to 30 months imprisonment for his role in conspiracy to commit securities fraud and wire fraud.  At trial, the government presented evidence that Fleishman earned a fee for putting industry experts with inside information in touch with hedge fund managers.  The evidence against Fleishman included recordings of phone calls and meetings between him and government informants as well as testimony from cooperating witnesses.  

In his appeal, Fleishman challenged the trial court’s authorization of wiretaps which produced the recordings admitted at trial.  The Second Circuit found no legal support in his argument that a Fourth Circuit case, Abraham v. County of Greenville, 237 F.3d 386 (4th Cir. 2001), somehow prohibited the government’s wiretaps.  Also unavailing was Fleishman’s challenge that he was prejudiced because the trial court’s jury instructions did not advise that Fleishman’s guilt could not be inferred from the guilty pleas of cooperating witnesses.  The Second Circuit held that Fleishman was not prejudiced given the strength of the government’s case and the fact that the government never suggested that guilt could be inferred from those guilty pleas.  

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A full copy of the Second Circuit’s summary order can be found here.