Case Study Of Willful Blindness In Criminal Law

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C. A tippee can satisfy the knowledge requirement of insider trading with imputed knowledge. A tippee has knowledge of a tipper’s breach if the tippee is willfully blind to the breach. Criminal law has long provided that a person cannot avoid liability by hiding from facts that a reasonable person would know. Stone v. United States, 113 F.2d 70, 75 (6th Cir. 1940). Willful blindness is an alternative method of proving that a defendant acted knowingly or willfully. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068–69 (2011). Courts use the doctrine to prevent defendants from escaping liability by “deliberately shielding themselves from clear evidence.” Id. A willfully blind defendant is just as culpable as a defendant who has actual knowledge. Id. This Court has held that two elements must be met for a defendant to be willfully blind. The first element is the “defendant …show more content…

The trial court found that DiNofrio had imputed knowledge of the breach and thus could be found willfully blind. R. 18. While, the court of appeals disagreed that willful blindness could be used in an insider trading case, it did not dispute the trial court’s finding that DiNofrio had imputed knowledge of the breach. R. 26–27. The evidence is sufficient to show that such imputed knowledge did exist. DiNofrio was at the same party as the original tipper and tippee, she knew they were cousins, and had seen the two of them talking that evening. R. 4–5. Cuzick provided DiNofrio confidential information about iTech, Cuzick told her it came from a good authority, and DiNofrio knew that the Director of Finance of iTech was at the party. R. 18. DiNofrio also may have known Bookwalter and talked to him that evening. R. 14. Together, this information and DiNofrio’s trades are sufficient to establish that DiNofrio was willfully blind to Abernathy’s

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