U.S. judge dismisses SEC case over CDS

NEW YORK, June 25 (Reuters) - A U.S. judge on Friday dismissed the first lawsuit brought by U.S. market regulators alleging insider trader over credit default swaps.

The U.S. Securities and Exchange Commission sued Deutsche Bank bond salesman Jon-Paul Rorech, 39, and former Millennium Partners hedge fund portfolio manager Renato Negrin, 46, in 2009.

The pair had a bench trial in April before Manhattan federal court Judge John Koeltl. In a written decision on Friday, the judge agreed with defense arguments that in a two-way flow of information it was understood it was not confidential.

"It is farfetched to think that Mr. Rorech could believe that the very information shared with outsiders by his supervisor and the head of high yield capital markets would somehow not be appropriate for him to share," the judge wrote.

The judge also said the SEC had not shown that Rorech had any motive to share "inside" information with Negrin.

The case is SEC v Rorech et al, U.S. District Court for the Southern District of New York, No. 09-04329. (Reporting by Grant McCool and Basil Katz; Editing by Gary Hill)