U.S. attorney for the Southern District of New York, Preet Bharara, announced on Friday that his office is dismissing the charges against Michael Steinberg, former portfolio manager at SAC Capital, and six others who were accused of insider trading in 2013 after the U.S. Supreme Court declined to hear an appeal of a lower court decision throwing out a similar case.

“Today, this office will move to dismiss charges against Michael Steinberg, who was previously convicted at trial, and six co-operating witnesses who pled guilty, all in connection with the same insider trading scheme,” Bharara says in a statement.

The decision to dismiss the charges follows a U.S. Court of Appeals for the Second Circuit decision handed down earlier this year in U.S. v. Newman, Bharara says. Specifically, the appeal court overturned the convictions of a couple of hedge fund managers who had also been found guilty of insider trading. The court had found that the government failed to prove that the fund managers knew they were trading on inside information and that the source of that information benefited from the tips.

The government sought to appeal that ruling to the U.S. Supreme Court, arguing that the appeal court decision sets a new standard that “will result in significant harm — restricting enforcement of the securities laws against culpable actors, spurring fraudulent activity, undermining the necessary work of legitimate analysts, depriving the financial community of guidance on how to comply with the law, and decreasing public confidence in the securities markets.”

However, earlier this month, the U.S. Supreme Court declined to hear the case. As a result, the U.S. attorney has decided to drop the charges against Steinberg and others.Steinberg was found guilty of conspiracy to commit securities fraud and four counts of securities fraud after a five-week jury trial in 2013 amid allegations that he earned US$1.9 million in trading profits based on inside information about two technology stocks, Dell Inc. and Nvidia Corp.

“After careful consideration of all of our prior insider trading prosecutions, insisting on maintaining guilty pleas in these cases would not be in the interests of justice,” Bharara says in the statement. “These prosecutions were all undertaken in good faith reliance on what this office and others, including able defence counsel for all those who pled guilty, understood to be the well-settled law before [the appeal court decision].”