NEW YORK, (Reuters) - An appeals court on Thursday threw out the convictions of six brokers and traders accused of conspiring to misuse company "squawk boxes" for insider trading, ruling that prosecutors withheld evidence and jurors received inadequate instructions.
The brokers were charged in 2005 with scheming with traders at the now-defunct broker-dealer A.B. Watley Inc to generate millions of dollars in illegal profits.
Prosecutors had said that between 2002 and 2004, the traders were allowed to routinely listen to the brokerage firms' internal speaker systems ("squawk boxes") through open telephone lines that broadcast pending orders by institutional customers and are considered confidential.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York vacated the convictions and sent the case back to U.S. District Court in Brooklyn.
The six defendants, including brokers at Merrill Lynch & Co Inc, now part of Bank of America Corp, Citigroup
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