May 21, 2020 / 1:54 PM / 12 days ago

2nd Circuit affirms win for investment adviser, client in suit over insider status

Investors who give their advisers discretionary authority to manage their accounts do not become “group insiders” by keeping that account after the adviser becomes a corporate insider, a federal appeals court held Wednesday.

The 2nd U.S. Circuit Court of Appeals affirmed the dismissal of a suit seeking to force “John Doe,” an unnamed client of New York-based International Value Advisers, to disgorge profits on trades of shares in the former DeVry Education Group after June 2016, when IVA acquired control over 19.5 percent of DeVry’s outstanding common stock and had its managing partner named to DeVry’s board.

To read the full story on Westlaw Practitioner Insights, click here: bit.ly/3bM1RkN

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