Streeter, a lead prosecutor in the Rajaratnam trial who is now a partner at Dechert, explained that the same logic applied to insider trading by pointing to compliance efforts instituted by hedge funds to combat insider trading.

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The decision, explained Columbia Law School Professor John Coffee, who chaired the insider trading conference that included key participants from recent insider trading trials such as prosecutor Reed Brodsky, defense attorney Gary Naftalis, and Judge Jed Rakoff from the Gupta trial, reflected a time where regulators had greater discretion and authority.

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Paul Steven Singerman, the lawyer for Ruden McClosky, a bankrupt law firm that won court permission to keep some insider-pay details confidential, explained the practice.

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The SEC explained in a notice Friday that while it had previously investigated allegations of insider trading in Microsoft shares by Pequot, Samberg and a former Pequot and Microsoft employee named David Zilkha, it closed that investigation without action in 2006.

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The combined caseloads produced a sharp increase in insider attacks (48 percent, up 26 percent from the previous year), which Hutton explained is because companies suffering a data breach because of an employee incident often prefer to call law enforcement.

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