Whether a stock trading on an exchange whose physical headquarters is located in Manhattan suffices to establish venue in the Southern District of New York for insider-trading charges

This criminal case involves allegations of insider trading. The Constitution, the U.S. Code, and the Federal Rules of Criminal Procedure all require that a criminal defendant be tried where his crime was (allegedly) committed. In the modern era of electronic trading, trades are no longer executed on physical trading floors, but are instead processed on computer servers that may be located anywhere. The U.S. Court of Appeals for the Second Circuit has nonetheless doubled down on its outdated precedent holding that a stock exchange’s brick-and-mortar headquarters in Manhattan suffices to establish venue for an insidertrading offense in the Southern District of New York, regardless of where the trades in question actually executed. This rule effectively grants the U.S. Attorney’s Office for the Southern District of New York carte blanche to prosecute virtually all insider-trading cases, an outcome fundamentally at odds with the Founders’ “deep and abiding antipathy to letting the government arbitrarily choose a venue in criminal prosecutions.” United States v. Fortenberry , 89 F.4th 702, 712 (9th Cir. 2023). The question presented is whether a stock trading on an exchange whose physical headquarters is located in Manhattan suffices to establish venue in the Southern District of New York for insider-trading charges related to that stock.