Securities Regulation Daily Wrap Up, SUPREME COURT DOCKET—U.S.: Cert denied for petitions on commodities insider trading, reliance presumption, federal jurisdiction, (Nov 12, 2025)

By Rodney F. Tonkovic, J.D. and Lene Powell, J.D.

The court turned aside three recently filed petitions, including a case concerning the first criminal prosecution for commodities insider trading.

The Supreme Court has dashed the hopes of three commodities and securities petitioners. Certiorari was denied for: a former energy company CEO convicted of insider trading in commodities; a video game company asking the court to rule on the fraud-on-the-market presumption; and a petitioner looking to fold its case into federal jurisdiction. Certiorari for all three petitions was denied on November 10, 2025.

Clark v. U.S. The court declined to grant certiorari in an appeal of the first criminal prosecution of commodities insider trading. Matthew Clark, the former president of an energy company, pleaded guilty in connection with an illegal kickback scheme and a commodities insider trading scheme involving natural gas futures contracts. The Fifth Circuit upheld his convictions for insider trading, prohibited commodities transactions, and conspiracy to commit honest services fraud.

Responding to Clark’s vagueness argument, the U.S. argued that provisions of the Commodity Exchange Act and CFTC regulations regarding fictitious sales clearly covered the transactions at issue: “noncompetitive prearranged trades that are made to appear legitimate and cause a dishonest price to be recorded.”

The U.S. further argued that Clark had adequate notice that the statute and regulations forbid insider trading, observing that “courts may apply a statute to novel conduct so long as the plain text permits.” Clark’s claim of “desuetude”—that no one has been prosecuted under 7 U.S.C. 6c(a)(2)—did not help him, since “it has long been clear that Section 6c covers the sort of insider-trading scheme at issue here, and the statutes are equally clear that criminal consequences might follow from such conduct.”

Finally, the U.S. asserted that delegating authority to the CFTC to promulgate rules with criminal penalties did not violate the separation of powers or nondelegation doctrines. The delegation was appropriate and provided an intelligible principle of “preventing commodities traders from using confidential information for their personal advantage.”

Shanda Games. Shanda Games asked the Court to consider whether the Basic fraud-on-the-market presumption is available to all plaintiffs who buy or sell securities or only those who do so at the market price in an efficient market. In this case, minority shareholders who sold their shares in a freeze-out merger brought suit alleging that Shanda's proxy projections significantly underestimated the company's financial prospects.

Reviving claims dismissed by the district court, a majority of a Second Circuit panel held that the plaintiff was entitled to the fraud-on-the-market presumption even though he did not trade at the market price. Even though their votes are not required for the merger, the minority shareholders looked to the market price to decide whether to tender their shares or to dissent and seek appraisal, the panel said.

Shanda's petition argued that the presumption requires a transaction anchored to the market price. Otherwise, a plaintiff cannot be presumed to have relied on the misstatement incorporated in the market price. Shanda maintained that the plaintiff's shares were cashed out automatically at a price set by private negotiation, so the Second Circuit allowed the case to move forward based on what the plaintiff might hypothetically have done—not an overt act—so there was not transaction at a price set by an efficient market.

The respondent waived his right to file a response, but the petition garnered one amicus brief by SIFMA in support of the petitioners. SIFMA argued that the Second Circuit's decision broadens the scope of allowable securities claims and represents an incursion into state-law processes that protect the interests of dissenting minority shareholders without burdening transactional activity.

AST & Science.This case involves the breach of a finders-fee arrangement between the parties. The petitioner argues that because its breach of contract claim depended on issues of federal law, the case falls squarely under Section 27, which confers exclusive federal jurisdiction over claims to enforce any liability or duty created by the Exchange Act.

The Eleventh Circuit reversed a district court judgment in favor of the petitioner, holding that federal jurisdiction was lacking because the federal issue was not "substantial"—a requirement under Supreme Court precedent on the issue.

Petitioner AST & Science LLC argued that its breach of contract claim depended on issues of federal law. Specifically, the respondent allegedly breached its obligation to take no action requiring registration under the securities laws, moving it from a "finder" into the position of a broker-dealer.

The petition asked the Supreme Court to revisit Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 578 U.S. 374 (2016), which addressed jurisdiction under Section 27. AST pointed to a concurrence by Justice Thomas, joined by Justice Sotomayor, and its proposal that Section 27 should confer federal jurisdiction if the complaint alleges claims that necessarily depend on establishing a violation of an Exchange Act requirement.

The respondent waived its right to respond, and there were no briefs in this case.

Read the Docket. This case, and others before the Court, may be referenced in the latest version of the Supreme Court Docket. Issued opinions, granted petitions, pending petitions, and denied petitions are listed separately, along with a summary of the questions presented and the current status of each appeal.

The petitions are Nos. 25-8 (Clark), 25-351 (Shanda Games), and 25-453 (AST).

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