Securities Fraud Convictions From Medicare Pricing Scam Vacated

The government will be permitted to dismiss the fraud and conversion convictions of defendants who used information about impending changes in Medicare and Medicaid pricing to trade the stocks of affected companies, a divided Second Circuit said Tuesday.

Under the US Supreme Court’s recent holding in Kelly v. United States, the information used in the trades wasn’t “property” or a “thing of value” as required by the wire and securities fraud statutes, the majority opinion by Judge Amalya L. Kearse said. Kelly held that fraud statutes don’t criminalize all dishonesty and that the government must prove that the object ...