Happy to see Gordon Gekko on the front page of the Journal today. He is now part of a PSA put on by the FBI to discourage insider trading. The 120 person case that is being compiled and could be expanded to 240, is by far the largest in history.
The most astonishing part to me, ONLY 66 PEOPLE HAVE BEEN CHARGED WITH INSIDER TRADING SINCE 2009??!?! They really must only go elephant hunting. I am no lawyer but you must just have to build an iron clad case to get people convicted on this stuff. Only 57 of the 66 were convicted or plead guilty.
Someone help me out here. Am I reading this too literally or are there really such a limited number of cases.
Because they dont allow wires on golf courses.
Even if I'm best friends with the CEO of Megacorp. Inc. and he knows what his stats are and tells me them, to prove a conversation took place where I obtained insider information is particularly difficult. You either need phone transcripts or email logs, and anyone dumb enough to leave those lying around is either negligent, naive or innocent.
Even if I book a flight to go to Tokyo have dinner with the CEO of company A, spend lots of money on him and buy him a car. Then fly home and short his stock to the ground, they need to prove he told me his results.
They should do what they do for companies in whistleblowing. Give the blower immunity, and allow them to take X% of the profits. With noone trusting anyone else, it would put the practise out of business pretty fast. Not to mention massively rearrange the top performers of the financial world.
Ask any relatively pretty and smart girl who talks to finance types. They openly admit to it in their bravado speeches.
nm
You could also be looking at literal numbers of insider trading which would be artificially low. That could still mean that there were other "peripheral" cases that resulted in other charges. For example, Martha Stewart didn't go to jail for insider trading, she went to jail for obstruction of justice for deleting any references to meetings with Waksal on her old calendars. I think she also made verbal lies to investigators, but can't recall at the moment.
So it's possible that there's people that were charged with insider trading but ultimately convicted of something else.
lack of resources + difficult to prove
regulators = clowns
protip: find out # of settlements as opposed to convictions. just like there are only x number of murders in US based on 'convictions' instead of plea bargains to manslaughter etc
This should hopefully increase the number:
http://thehill.com/blogs/on-the-money/banking-financial-institutions/20…
Those plea bargain stats might be difficult to find, like company infractions a lot of this things are handled on the hush with no official admitting of guilt. I think the idea of elephant hunting is also pretty relevant. The resources to track down a joe shmoe insider case versus a hundred million dollar insider case would be essentially the same. Regulators need returns on their investments like everyone else, its just measured through convictions rates weighted with case sizes. Just like with other criminal activities, I don't think a DA is boosting his reputation by nailing thieves guilty of $50 Larceny.
those 66 people didn't bribe...
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