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Earlier this year, the SEC prevailed on a “shadow trading” theory in SEC v. Panuwat. Although the outcome of that case was obviously fact-specific, many companies are considering the verdict as they continue to refine their insider trading policies & trainings.

Some folks were also holding out hope that the court would reconsider its verdict. Alas, it doesn’t appear that will happen, since the judge has now denied the defendant’s request for a new trial, which was premised in part on whether the jury should have been instructed that the SEC’s case was based on a new theory of liability. Bonnie Eslinger from Law360 recaps:

The relative rarity of the SEC enforcement action was not relevant to the jury’s determination, and framing it as such would have been prejudicial, Judge Orrick said. That’s why, he added, no one at trial was allowed to say the enforcement action as brought without fair notice, or characterize it as “unique,” “novel,” “highly unusual” or other such descriptors.

The SEC brought the case under a misappropriation theory of insider trading, not traditional insider trading, and the jury was told the difference, the judge said.

“That the jury found in the SEC’s favor is not a function of any prejudice arising from use of the term ‘insider trading’ throughout the trial, but rather a function of the jury finding that Panuwat misappropriated information for his own personal profit, in violation of the securities laws,” Judge Orrick wrote.

The former executive was fined $321k. The judge noted that the civil penalty would function as an appropriate deterrent to the defendant and others, and that the verdict wouldn’t “permanently damage his career” because it didn’t include a D&O bar.

– Liz Dunshee