[JURIST] A judge for the US District Court for the Eastern District of Pennsylvania [official website] ruled [opinion, PDF] Wednesday that the Fifth Amendment [text] protects the right of insider trading suspects to withhold the passcodes to their business cell phones. Defendants were under investigation by the Securities and Exchange Commission (SEC) [official website] for making illegal trades for a bank using non-public information. The SEC believed through its investigation that communications connected to the insider trading would be found on cell phones that were turned over by the bank. However, many of the cell phones were not able to be opened because they were locked by personal passcodes. The SEC argued that the phones held by the bank were corporate records and therefore the former users could not invoke Fifth Amendment protection. US District Court Judge Mark Kearney rejected this argument, writing, “[w]e find, as the SEC is not seeking business records but Defendants’ personal thought processes, Defendants may properly invoke their Fifth Amendment right.” The court also noted that the SEC had no evidence to showing that the information they were seeking was actually on the phones of the former bank employees.
Cell phones have also raised important Fourth Amendment [text] questions regarding search and seizure. Last November a Virginia judge ruled that police can force criminal suspects to unlock their cell phones [JURIST report] with a fingerprint scanner to allow officers to open and search them. Officers may not, however, compel suspects to give up their phone passcodes. In June of last year the US Supreme Court ruled that police officers must obtain a warrant [JURIST report] before searching a person’s cell phone data, even at the time of arrest.