Federal prosecutor Preet Bharara isn’t backing down.
With several of his more than 80 insider-trading convictions at stake, Bharara is playing hardball with those who are trying to wriggle out of their convictions on the basis of a recent appeals court decision that threw out two of them.
“[The feds] played the whole game and they won,” said white-collar defense lawyer Stuart Slotnick. “They don’t want to give the ball back.”
Not even to Michael Kimelman.
Kimelman, 44, is one of the more sympathetic individuals caught up in Bharara’s crackdown. During his trial, even the judge indicated the case against him was weak.
Now Kimelman, who has already done 20 months in prison, is asking an appeals court to overthrow his conviction based on the new definition of insider trading. The ex-Wall Streeter says the government presented no evidence he knew that information he traded on fit the narrower definition.
But the government doesn’t think it matters, in large part because Kimelman never brought up the issue on appeal. His claim has been “procedurally defaulted,” the government said in court papers earlier this month.
During the trial, Judge Richard Sullivan did not tell jurors the government had to show that Kimelman knew the tippers received a substantial benefit.
The same instructions in the trial of Todd Newman and Anthony Chiasson led the appeals court to overturn their case — setting the new standard.
“The procedural default is irrelevant because under Newman, Kimelman is actually innocent,” said Kimelman lawyer Alexandra Shapiro in a recent filing.