Key Takeaways
- • Matthew Panuwat's April 2024 insider trading conviction is under appellate review at the Ninth Circuit, with oral arguments held June 11, 2026, centered on whether he owed a fiduciary duty to Medivation not to trade Incyte securities while possessing material nonpublic information about Medivation.
- • Judge Lawrence VanDyke signaled skepticism of the SEC's case, calling its interpretation of Medivation's insider trading policy a "stretch" and suggesting the policy language was unambiguous in Panuwat's favor—a potential sharp departure from the district court's analysis that could undermine the SEC's primary theory.
- • The panel expressed concern over jury instructions that allowed liability based on "entrustment" theory without requiring proof of a knowing breach of a specific fiduciary duty, with Judge VanDyke indicating a legally incorrect instructional pathway would warrant a new trial.
- • The case hinges on whether Incyte was a "competitor" to Medivation under the written insider trading policy; if not, the SEC may attempt to fall back on a broader "entrustment" theory that could impose trading restrictions beyond what the employer expressly stated.
- • While both sides received skeptical questioning, even defense-favorable commentary from judges suggests Panuwat's most likely outcome is a remanded new trial rather than outright judgment as a matter of law dismissing the case entirely.
Summary
Matthew Panuwat, a former biopharma executive, was found liable for insider trading in April 2024 after a jury trial in federal court in Northern California. The SEC filed the case in 2021, alleging "shadow trading"—trading in Incyte securities while possessing material nonpublic information about his employer, Medivation. The verdict ignited significant debate within the financial and compliance communities regarding the scope and propriety of insider trading prohibitions, particularly the theory that an executive could be liable for trading in a competitor's securities based on employer information. That debate now reaches the appellate stage before the U.S. Court of Appeals for the Ninth Circuit.
On June 11, 2026, a three-judge panel composed of Judges Jacqueline Nguyen, Lawrence VanDyke, and Robert Huie conducted oral arguments on Panuwat's appeal. Panuwat argues he is entitled to judgment as a matter of law, contending the SEC failed to prove he owed a fiduciary duty to Medivation regarding Incyte trading, or alternatively, that a new trial is warranted. Judge VanDyke emerged as the most skeptical of the SEC's position, characterizing the agency's interpretation of Medivation's insider trading policy—which prohibited trading in "another publicly traded company" including "significant collaborators, customers, partners, suppliers or competitors"—as a "stretch." VanDyke suggested the policy language was unambiguous in Panuwat's favor, implying the enumerated list was exhaustive rather than illustrative. This position directly contradicts the district court's finding that the word "including" rendered the list exemplary.
The centerpiece of legal dispute concerns whether Medivation and Incyte were competitors. Panuwat argued they produced different drugs treating different cancers and thus did not fall within the policy's competitor category. The district court repeatedly rejected this characterization. Judge VanDyke's skepticism of the SEC's broader interpretation carries significant implications: if adopted, it could undermine the SEC's primary theory of duty and shift focus to an "entrustment" doctrine—a general agency-based duty arising from Medivation entrusting confidential information to Panuwat. Judge VanDyke questioned whether a written insider trading policy would supersede such an entrustment theory, pressing the SEC on which would prevail in a conflict.
Judge Nguyen, while less openly skeptical of the SEC than VanDyke, raised concerns about the defense's arguments, suggesting Medivation's policy drafters "knew what they were doing" in its scope and questioning whether Panuwat forfeited certain arguments by failing to raise them at trial. Critically, VanDyke indicated that if the jury received legally incorrect instructional guidance alongside legally proper alternatives, a new trial would be warranted, as the appellate court would have no way to determine which route the jury followed. Given the mixed skepticism across the panel, consensus opinion suggests a complete victory for Panuwat is unlikely, though a remanded trial remains plausible.
On June 11, 2026, a three-judge panel composed of Judges Jacqueline Nguyen, Lawrence VanDyke, and Robert Huie conducted oral arguments on Panuwat's appeal. Panuwat argues he is entitled to judgment as a matter of law, contending the SEC failed to prove he owed a fiduciary duty to Medivation regarding Incyte trading, or alternatively, that a new trial is warranted. Judge VanDyke emerged as the most skeptical of the SEC's position, characterizing the agency's interpretation of Medivation's insider trading policy—which prohibited trading in "another publicly traded company" including "significant collaborators, customers, partners, suppliers or competitors"—as a "stretch." VanDyke suggested the policy language was unambiguous in Panuwat's favor, implying the enumerated list was exhaustive rather than illustrative. This position directly contradicts the district court's finding that the word "including" rendered the list exemplary.
The centerpiece of legal dispute concerns whether Medivation and Incyte were competitors. Panuwat argued they produced different drugs treating different cancers and thus did not fall within the policy's competitor category. The district court repeatedly rejected this characterization. Judge VanDyke's skepticism of the SEC's broader interpretation carries significant implications: if adopted, it could undermine the SEC's primary theory of duty and shift focus to an "entrustment" doctrine—a general agency-based duty arising from Medivation entrusting confidential information to Panuwat. Judge VanDyke questioned whether a written insider trading policy would supersede such an entrustment theory, pressing the SEC on which would prevail in a conflict.
Judge Nguyen, while less openly skeptical of the SEC than VanDyke, raised concerns about the defense's arguments, suggesting Medivation's policy drafters "knew what they were doing" in its scope and questioning whether Panuwat forfeited certain arguments by failing to raise them at trial. Critically, VanDyke indicated that if the jury received legally incorrect instructional guidance alongside legally proper alternatives, a new trial would be warranted, as the appellate court would have no way to determine which route the jury followed. Given the mixed skepticism across the panel, consensus opinion suggests a complete victory for Panuwat is unlikely, though a remanded trial remains plausible.
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