In The News
September 17, 2013
In a captivating piece, a columnist at Forbes.com details the investigative efforts put into tracking down and prosecuting an Australian defendant who had made merely $7,900 in profits while living and working in the US. The defendant's harrowing experience shows the potential unintended consequences of insider trading—in his case, it led to jail time in a dangerous foreign prison even before his extradition to the US and his guilty plea.
September 2, 2013
This extensive feature in the magazine Fortune explores the subtle and complex uncertainty that blurs the edges of insider-trading law. The SEC and the Supreme Court have reached dissenting views on the exact boundaries of insider trading, and this legal haze can make life tricky on Wall Street. As one of the author's sources observes, Congress and the SEC have never defined insider trading by statute because leaving gray areas around the rules can "preserve wiggle room for the SEC to respond to new types of fraud."
September 22, 2011
"Getting a stock-market tip has always been a sort of all-American fantasy," the author observes, "and despite the risk of detection, the desire for an edge seems irresistible." Indeed, it can be a daily occurrence. The Financial Industry Regulatory Authority (FINRA) annually hands the SEC about 250 potential cases of insider trading—an average of one case every market day. The SEC and financial regulators have increasingly sophisticated means of detecting insider trading and, by extension, the illegal tipping that often prompts it.
September 22, 2011
The NASPP's executive director cites a recent case of insider trading involving the theft and abuse of nonpublic information about Disney's planned acquisition of Marvel Entertainment. Before the deal had been announced publicly, the defendant allegedly stole confidential information about it from the mobile phone of his girlfriend, who worked for Disney at the time. This example shows the importance of insider-trading education for all employees of a company, not just for the insiders and executives who regularly handle sensitive confidential information. Read the formal SEC complaint in the case.
May 11, 2011
Following the historic insider-trading conviction of Raj Rajaratnam, Bloomberg considered his giant global web of informants and its implications for the future, in both safeguarding confidential corporate information and prosecuting those who trade on it. In the words of one quoted expert, inside information is "not just in the hands of CEOs and CFOs anymore." Enforcement agencies must come to grips with "the recent democratization and globalization of what is allegedly inside information."
April 6, 2011
Time after time, insider-trading violators think they can't be caught—until they are.
April 3, 2011
The "expert networks" that some hedge funds and other financial institutions consult to make investment decisions are at the center of big recent insider-trading cases. This article explains what expert networks are, why scrutiny of them is increasing, and how interpretations differ on the so-called "mosaic theory" of information-gathering.
November 2, 2009
Adopting the playbook of the wars against drugs and terrorism, the SEC has begun using wiretaps, advanced software, and informants in a new crackdown on insider trading among executives and other high-ranking insiders who often know secret market-moving information.
The SEC's intensified search for insider trading includes enhanced scrutiny of Rule 10b5-1 trading plans.