The U.S. District Court for the Southern District of New York dismissed a New York law malpractice and fraud claims by convicted inside trader Winifred Jiau against her former attorney. See Jiau v. Hendon, http://www.bloomberglaw.com/public/document/Jiau_v_Hendon_Docket_No_112cv07335_SDNY_Sept_28_2012_Court_Docket.
Prosecutors contended that in her role as an employee of an expert network company, Jiau obtained inside information about public companies through professional and personal contacts and sold the information to portfolio managers at hedge funds, who traded on the inside data. A jury convicted Jiau on conspiracy and securities fraud and the defendant then sued her lawyer for malpractice. The court found no claim.
Although this turned out well for the lawyers, it should remind everyone of the potential dangers in these representations.