“For months now, the U.S. Attorney for the Southern District of New York, Preet Bharara, has been boasting of his office’s perfect record on insider trading convictions and guilty pleas, which now stands at 80-0. But on Tuesday some potential cracks could appear in that pristine run.

“The U.S. Court of Appeals for the Second Circuit will hear arguments in a case that is being closely watched—and fretted over—by investigators involved in the government’s historic string of insider trading prosecutions. Two convicted hedge fund portfolio managers are arguing that what the government accused them of doing isn’t actually illegal, and the appeals court appears to be taking their arguments seriously. If the Second Circuit rules against the government, in the words of one attorney close to the case, it would be “nothing less than an earthquake.”

“Anthony Chiasson, formerly of hedge fund Level Global Investors, and Todd Newman of Diamondback Capital were convicted in December 2012 of insider trading in two technology stocks, Dell and Nvidia. Both were later sentenced by Judge Richard Sullivan to six-and-a-half and four-and-a-half year prison terms, respectively. Both men, who fought the charges through a six-week trial, appealed their convictions based on an argument that cuts to the heart of the murkiness of insider trading law.”

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