In United States v. Walters, 17-2373 (Dec. 4, 2018), the Second Circuit (Jacobs, Chin, Kuntz (by designation)) affirmed the conviction of professional gambler William T. Walters for securities fraud and related claims arising out of insider trading.  On appeal, Walters argued that the indictment should be dismissed in light of repeated leaks of confidential grand jury information made by the FBI to reporters from The Wall Street Journal and The New York Times in violation of Federal Rule of Criminal Procedure 6(e) and the Due Process Clause of the Fifth Amendment.  The Court agreed that the FBI’s leaks violated Rule 6(e), but it determined that Walters was not prejudiced by the leaks, and therefore dismissal of Walters’s indictment was inappropriate.  Moreover, the Court held that Walters’s Fifth Amendment Due Process rights were not violated because the leaks were not the kind of systematic and pervasive misconduct that could serve as an exception to the prejudice requirement, nor were these leaks so outrageous as to undermine the judicial process used to obtain Walters’s conviction. In light of Walters, we consider whether the current legal framework provides sufficient deterrence against violations of Rule 6(e).   

To read Harry Sandick and Danielle Quinn's full article in Law360 on the topic, please click here.