(Adds comments from defendants' lawyers, Standard & Poor's)
By Jonathan Stempel
NEW YORK, Dec 6 (Reuters) - A federal judge in Manhattan on Thursday rejected requests by a Standard & Poor's credit ratings analyst and a friend to dismiss criminal insider trading charges related to the $9.3 billion merger of paint makers Sherwin-Williams Co and Valspar Corp.
U.S. District Judge Jed Rakoff said the indictment's failure to allege that the analyst Sebastian Pinto-Thomaz and Jeremy Millul, a jeweler in Manhattan's Diamond District, shared a "meaningfully close personal relationship" didn't matter because it said Pinto-Thomaz had an "intention to benefit" Millul.
Pinto-Thomaz's lawyer, Henry Mazurek, said prosecutors would not be able to prove their case at trial.
"We are disappointed that the Court denied Mr. Millul's motion to dismiss the insider trading charges," said Millul's lawyer, Michelle Shapiro.
Prosecutors accused Pinto-Thomaz of tipping Millul and another friend in March 2016 about the impending merger after learning about it confidentially at work, and that the friends made about $300,000 trading on his tips.
Pinto-Thomaz and Millul argued that a 2016 U.S. Supreme Court decision rejecting the Manhattan federal appeals court's narrow view of insider trading left intact that court's requirement that a tipper and tippee share a close relationship for there to be insider trading.
But Rakoff, who has called on Congress to simplify insider trading law and bemoaned courts that have "somehow managed to complicate" it, said that relationship isn't required if there was a quid pro quo or an intention to benefit a tippee.
"The indictment's allegations that Pinto-Thomaz gave information to Millul with the intention to benefit Millul is directly, explicitly encompassed by (a Supreme Court) rule concerning 'intention to benefit the particular recipient,'" Rakoff wrote.
A spokesman for U.S. Attorney Geoffrey Berman in Manhattan declined to comment.
S&P had suspended Pinto-Thomaz when the charges were announced in June, and his employment ended in July, according to a spokesman for the firm.
The other friend, Abell Oujaddou, who runs an upscale hair salon in Manhattan's Flatiron District, pleaded guilty to insider trading in October.
Millul is trying to sever his case from Pinto-Thomaz's so that he is not unfairly implicated in Oujaddou's trading.
Shares of Valspar surged 23 percent on the first trading day after Cleveland-based Sherwin-Williams announced it would buy the company. The merger closed on June 1, 2017.
The case is U.S. v. Pinto-Thomaz et al, U.S. District Court, Southern District of New York, No. 18-cr-00579. (Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum and Richard Chang)