United States v. Parigian, No. 15-1994 (1st Cir. 2016)Annotate this Case
Acting on “obviously nonpublic information” that a golfing buddy, McPhail, received from a corporate insider, Parigian made more than $200,000 trading in securities. A federal criminal securities fraud indictment alleged a “misappropriation theory” against Parigian, arguing that Parigian knew or should have known that, by providing the inside information to Parigian, McPhail breached a duty of trust and confidence and personally benefited by doing so. He pled guilty to the charges conditionally. The First Circuit rejected Parigian's preserved challenges to the indictment, following the circuit’s controlling precedent: allegations of a friendship between McPhail and Parigian plus an expectation that the tippees would treat McPhail to a golf outing and assorted luxury entertainment is enough to allege a benefit if a benefit is required. The court rejected an argument that the government was obligated to allege that the insider was also expecting a benefit when passing along confidential information to McPhail in the first instance.