A U.S. prosecutor faced tough questioning by a federal appeals court Tuesday over what must be proved to secure insider trading convictions, with one judge calling the government's view of the law "amorphous." The 2nd U.S. Circuit Court of Appeals in New York heard arguments in the case of Todd Newman, a former portfolio manager at the hedge fund Diamondback Capital Management, and Anthony Chiasson, co-founder of the hedge fund Level Global Investors. The three-judge panel weighed whether recipients of non-public information can be found guilty of insider trading without any requirement prosecutors prove they knew the source of the tip benefited from the disclosure. Antonia Apps, a lawyer for the government, argued prosecutors only need to establish that the recipients of insider information knew the tipper breached a duty to keep it confidential. "And here of course the defendants were told it came from the inside," she said. Her arguments were met by a round of sharp questioning
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