Insider trading cases

The definition of insider in one jurisdiction can be broad, and may cover not only insiders themselves but also any persons related to them, such as brokers, associates, and even family members. A person who becomes aware of non-public information and trades on that basis may be guilty of a crime.

1. What were some famous cases of insider trading?
2. What is an example of illegal insider trading?
3. What's considered insider trading?
4. Do people get in trouble for insider trading?
5. Who was convicted of insider trading?
6. How did R Foster Winans get caught up in insider trading?
7. What are the 2 types of insider trading?
8. How is insider trading prosecuted?
9. Can I buy shares in a company I work for?
10. Can you get fired for insider trading?
11. What is the maximum civil penalty for insider trading?
12. Can board members sell stock?
13. How much did Martha Stewart make in insider trading?
14. How did Ivan Boesky get caught?

What were some famous cases of insider trading?

Four cases that captured a significant amount of media coverage in the U.S. are the cases of Albert H. Wiggin, Ivan Boesky, R. Foster Winans, and Martha Stewart.

What is an example of illegal insider trading?

For example, suppose the CEO of a publicly traded firm inadvertently discloses their company's quarterly earnings while getting a haircut. If the hairdresser takes this information and trades on it, that is considered illegal insider trading, and the SEC may take action.

What's considered insider trading?

Insider trading involves trading in a public company's stock by someone who has non-public, material information about that stock for any reason. ... Insider trading is illegal when the material information is still non-public, and this sort of insider trading comes with harsh consequences.

Do people get in trouble for insider trading?

Criminal Penalties. The maximum prison sentence for an insider trading violation is now 20 years. The maximum criminal fine for individuals is now $5,000,000, and the maximum fine for non-natural persons (such as an entity whose securities are publicly traded) is now $25,000,000. Civil Sanctions.

Who was convicted of insider trading?

Damian Williams, United States Attorney for the Southern District of New York, announced that DOV MALNIK, an Israeli securities trader and finance professional, was sentenced to 30 months in prison for his role in an international insider trading scheme.

How did R Foster Winans get caught up in insider trading?

But in August 1985, Winans was convicted of fraud for leaking the contents of the Wall Street Journal's influential ``Heard on the Street'' stock market column. Two stockbrokers made $700,000 by trading on the leaks. He pocketed $30,000. ... broker.

What are the 2 types of insider trading?

However, there are two types of insider trading. One is legal, and the other is illegal. Legal insider trading is when insiders trade the company's securities (stock, bonds, etc.) and report the trades to the authorities such as Securities Exchange Commission (SEC).

How is insider trading prosecuted?

Insider trading can be punished strictly by civil sanctions, or involve criminal prosecution, or both. Federal law authorizes what are known as “treble” damages if the SEC brings a civil action against you for violating insider trading rules.

Can I buy shares in a company I work for?

Unfortunately not, as employees are restricted from buying or selling shares in the company during a 'close period,' usually a month or two before financial results are released. ... It is highly unlikely employees can buy or sell shares during this time.

Can you get fired for insider trading?

Employees who buy stock in their own company can be accused of insider trading, whether they are guilty of it or not. ... Penalties for insider trading – trading on non-public information – range from firing to jail time.

What is the maximum civil penalty for insider trading?

Insider Trading Sanctions Act of 1984

Specifically, the Act allowed the SEC to impose a civil penalty of up to three times the amount of profit made from the insider trading, and it increased the maximum criminal fine that could be imposed from $10,000 to $100,000.

Can board members sell stock?

Yes. In addition to the prohibition against insider trading, company stock held by an "affiliate" (e.g. any director or executive officer) of a public company generally must be sold under SEC Rule 144 and Section 16. ... How Executives And Directors Can Avoid SEC Troubles Before Trading Their Company Stock.

How much did Martha Stewart make in insider trading?

Stewart, who sold her ImClone stock in 2001—allegedly on a tip from ImClone founder Sam Waksal—got $58.43 a share, or a total of $229,513. She ended up being convicted in 2004 of lying to federal prosecutors about the circumstances surrounding the sale and spent five months in prison.

How did Ivan Boesky get caught?

But in November 1986, Boesky's game of arbitrage came to an end when federal officials arrested the then 49-year-old stock trader after discovering his role in a similar but separate insider trading scheme with Dennis Levine, an investment banker at the Wall Street firm Drexel Burnham Lambert, from which Boesky made ...