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Archives: Insider Trading

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Supreme Court affirms family insider trading conviction

On Tuesday, The United States Supreme Court unanimously affirmed an insider trading conviction by finding that inside information exchanged between relatives violates federal security laws. The case is Salman v. United States. The decision provides new life to family insider trading prosecutions which had been stymied by the Second Circuit’s 2014 Newman decision. Newman held … Continue Reading

SEC forces Mickelson to return $1 million from insider trading

PGA golfer Phil Mickelson agreed to forfeit almost $1 million that the Securities and Exchange Commission (SEC) said was obtained through insider trading. Mickelson was named as a “relief defendant” in a criminal case, filed in the Southern District of New York against professional gambler William Walters and a former director of Dean Foods, Thomas … Continue Reading

Supreme Court to review insider trading case

The Supreme Court has agreed to consider something that lies at the center of nearly every insider trading case: what prosecutors need to prove to win an insider trading conviction. This case aims to determine exactly what benefits corporate insiders need to receive for tips they disclose to traders to be illegal. It is expected to resolve … Continue Reading

Supreme Court refuses to review insider trading case

The U.S. Supreme Court on Monday refused to hear the government’s appeal of an adverse court of appeals decision in an insider trading case which could make it harder to prosecute insider trading. The decision threw out the 2012 convictions of hedge fund managers Todd Newman and Anthony Chiasson relating to tips about Dell and … Continue Reading

FBI increases criminal fraud investigations by 65%, director reports

FBI Director James Comey shared the bureau’s enforcement trends and objectives at the New York City Bar Association’s Third Annual White Collar Crime Institute on May 19. Comey recognized that although counter-terrorism is still a top priority for the agency, white-collar cases are receiving significant focus and resources. In the mortgage industry, agents are investigating … Continue Reading

SEC Charges Former VP of IR with Violation of Reg FD

On September 6, 2013, in its first Regulation FD enforcement action in almost two years, the SEC charged the former VP of IR for First Solar, Inc. ("First Solar") with violating Regulation FD.  An SEC investigation determined that Lawrence Polizzotto violated Regulation FD when he indicated in telephone conversations with certain analysts that First Solar was not likely … Continue Reading

Feds Announce Indictment Against SAC Capital Advisors

Federal prosecutors and the F.B.I. today announced a criminal indictment against SAC Capital Advisors, the embattled hedge fund managed by billionaire Steven Cohen, based on an alleged broad conspiracy to commit securities fraud through insider trading. The indictment against the hedge fund itself — as opposed to its employees — could have disastrous consequences for … Continue Reading

SEC Enforcement Activity: Feb. 11- 15

Second Circuit Hears Oral Argument on SEC-Citigroup Settlement Last November, a federal judge in New York rejected a proposed settlement between the SEC and Citigroup in connection with charges of misleading investors at the beginning of the financial crisis. This week the Second Circuit Court of Appeals heard oral arguments in the case, which saw the … Continue Reading

SEC Enforcement Activity: Jan. 14-18

SEC Settles with Pond Securities In Market Manipulation Case Four defendants – Andreas Badian, Jeffrey Graham, Pond Securities, and Ezra Birnbaum – agreed to settle charges of market manipulation, the SEC announced this week. In a complaint filed in April 2006, the SEC alleged that the defendants manipulated the stock of Sedona Corporation and violated record-keeping … Continue Reading

Rajat Gupta Convicted of Conspiracy and Insider Trading

Rajat Gupta, the former Managing Director of McKinsey & Company and board member at Goldman Sachs and Procter & Gamble, was convicted on four of six counts by a federal jury in New York today for providing nonpublic material information to Raj Rajaratnam in 2008. Specifically, Mr. Gupta was convicted of conspiring to commit insider … Continue Reading

Mark Cuban Continues His Vigorous Defense Against the SEC, Filing His Third Motion to Compel Production SEC Interview Notes and Summaries

As we have previously mentioned, the developments in the SEC’s insider trading case against Mark Cuban have been worth watching closely, particularly because Mr. Cuban is one of the rare individual defendants who has the financial ability to mount a defense in such litigation against the SEC, and his counsel has raised numerous interesting defenses … Continue Reading

New Jersey Judge Sentences Lawyer Who Pled Guilty to a Record-Length Twelve Years For Insider Trading – Longer Than Raj Rajaratnam

On Monday, June 4, 2012, New Jersey Federal Judge Katharine Hayden sentenced Matthew Kluger (a former associate at several prominent law firms) to twelve years in prison for his role in a insider trading scheme. One of his co-conspirators, Garrett Bauer (a Wall Street trader), received a nine-year sentence. On Tuesday, June 5, 2012, Judge … Continue Reading

All in the Family: A Pair of Insider Trading Cases

The SEC filed and settled two cases this week in which insiders tipped family members about events at publicly traded companies. In both cases, the insider and the tippees settled with the Commission, paying far more than any profit earned. • On Tuesday, May 8, 2012, the SEC filed a case against Mohammed Mark Amin, a Hollywood … Continue Reading

Judge Rakoff Issues Opinion in Civil Gupta Case Explaining Why He Will Not Compel the SEC to Produce Documents Relating to Settlement Negotiations

In a Memorandum Order entered on May 1, 2012, Judge Jed Rakoff formally denied a motion to compel by Rajat Gupta and Raj Rajaratnam, who were seeking an order that the SEC produce documents concerning settlement negotiations between the Commission and cooperating witnesses. In an April 11, 2012 telephone conference, Judge Rakoff tentatively ruled in … Continue Reading

BusinessWeek Article Provides Detailed Look Into The Inner Workings of the SEC’s Investigation of Raj Rajaratnam

An April 19, 2012 article by Devin Leonard of BusinessWeek profiles Sanjay Wadhwa, currently a deputy chief of the SEC’s market abuse group. The article takes a close look at the insider trading investigation of Raj Rajaratnam (and the many leads that investigation has yielded). Although many bloggers point out situations where the SEC or … Continue Reading

Obama Signs STOCK Act

President Obama signed into law today the Stop Trading on Congressional Knowledge Act of 2012 or the STOCK Act. The STOCK Act bans insider trading by members of Congress and their staff as well as various other executive branch and judicial branch employees. The STOCK Act also amends the Ethics in Government Act of 1978 to require … Continue Reading

Discovery Issues in the Parallel Rajat Gupta Cases – Judge Rakoff Directs SEC To Turn Over Witness Interview Materials From the Investigation to Prosecutors For Review Under Brady and Potential Disclosure to Defendant

On March 26, 2012, Judge Jed Rakoff issued an Opinion and Order in the two related cases against Rajat Gupta, granting in part a Motion to Compel and ordering the SEC to turn over to the U.S. Attorney’s Office materials relating to 44 witnesses (who were interviewed by the SEC and prosecutors jointly during the … Continue Reading

SEC Separately Charges (and Settles With) Insurance Broker and Tax Manager With Insider Trading of the Shares of the Same Company

On Monday, March 5, 2012, the SEC announced that it had filed two separate cases, charging William Duncan, a California-based insurance broker, and John Williams, a Pennsylvania-based tax manager, with insider trading in the shares of Hi-Shear Technology Corporation ("Hi-Shear"). Both men obtained material confidential information regarding Hi-Shear’s proposed acquisition by Chemring Group PLC ("Chemring") … Continue Reading

Gordon Gekko Is Working For the FBI

This week, the FBI released a Public Service Announcement starring two-time Academy Award-winning actor Michael Douglas warning viewers of the risks of securities fraud and encouraging individuals who have information regarding insider trading to contact their local FBI Office or submit a tip on line. The PSA begins with Mr. Douglas’s iconic "greed-is-good" speech from … Continue Reading

Another Expert Network Insider Trading Case: John Kinnucan Is Charged By Prosecutors and the SEC Nearly 15 Months After He Refused To Cooperate and Wear A Wire

On February 17, 2012, both the U.S. Attorney for the Southern District of New York and the SEC announced that they had brought charges against John Kinnucan, the President of Broadband Research Corporation, for insider trading. The criminal charges allege that he tipped clients regarding three companies, while the SEC’s civil case, which also named … Continue Reading