Enforcement Action

A senior executive at Alliance Fiber Optic Products agreed to settle charges that he made nearly $200,000 in illicit profits by trading on inside information in advance of three disappointing earnings announcements by the company, the Securities and Exchange Commission announced on July 24.

The SEC on May 31 charged a Goldman Sachs vice president of investment banking with repeatedly using his access to highly confidential information to place illicit and profitable trades in advance of deals on which the bank was providing investment banking advisory services.

A hedge fund advisory firm  has agreed to pay more than $4.6 million to settle SEC charges that it had inadequate policies and procedures to prevent the misuse of inside information, including information about confidential government decisions.

In a first-of-its-kind case, the SEC has charged a trio of Chinese hackers with stealing and trading on nonpublic, market-moving data from law firms.

The September 1, 2016 issue of Fortune has a terrific article detailing the legal saga of former hedge fund manager Todd Newman, the defendant in a hugely important insider trading decision that has had a major impact on how prosecutors and the SEC pursue such cases.

Dr. Edward Kosinski, a cardiologist in his late ’60s living in Weston, Connecticut, has been named as a defendant in a criminal prosecution—as well as an SEC enforcement action—charging him with insider trading for allegedly trading based on the confidential results of a clinical trial he conducted. Bruce Carton reports.

Almost exactly one year ago, the SEC and Justice Department both filed cases against a large group of hackers and traders who carried out an “unprecedented” insider-trading and hacking scheme. Now prosecutors have announced the latest guilty plea in the case—the fifth so far. Bruce Carton reports.

Bruce Carton has been warning us for years about two insider-trading mistakes. Last month, a former partner at law firm Fox Rothschild was sentenced to six months in prison for allegedly making both of them. See inside.

Bruce Carton offers a look at a 60 Minutes piece called “Inside Edge” about former stock analyst Roomy Khan, who was caught early by federal prosecutors investigating insider-trading by hedge funds and ultimately became a critical government informant in the criminal case that brought down Galleon Group's Raj Rajaratnam and dozens of others.

At least one commentator declared this week's SEC insider trading case alleging illegal profits of just $1,083 to be the smallest insider trading case ever. Nope!

Watching developments in the Level Global insider trading case -- which fell apart after the Second Circuit's landmark decision in Newman resulted in the conviction of its co-founder and another defendant being overturned -- feels like watching a movie rewind.

Today, NPR's Planet Money posted an interesting interview with former KPMG Partner Scott London about his insider trading ordeal, the famous "envelope of cash" photo, and why London ever agreed to become involved in the insider trading scheme in the first place.

The next constitutional challenge to the SEC's administrative proceedings process may be the most high-profile one to date. Lawyers for Steven A. Cohen confirmed that the SAC Capital founder intends to mount such a challenge if ongoing settlement talks are not successful. 

The SEC announced a partial settlement today in an unusual insider trading case that it brought earlier this year against Bonan Huang and Nan Huang -- two former employees in the fraud department at Capital One Financial Corp. The SEC alleges that the men made over $2.8 million in illegal profits by misappropriating credit card sales data on public companies.

The SEC announced an insider trading case today against a former Goldman Sachs compliance employee who allegedly used his access to investment bankers' emails to glean, and profit from, inside information.

The SEC loves to craft press release headlines that feature defendants' interesting or high-profile jobs, but it missed a golden opportunity to do just that in its announcement of an insider trading case last week.

SEC Administrative Law Judge Jason Patil dismissed an insider-trading case against a former Wells Fargo trader, noting that the SEC failed to prove that the person who allegedly tipped the trader did so for a personal benefit, as required by the Second Circuit’s disruptive opinion in U.S. v. Newman. Patil found that none of the supposed benefits to Bolan that the Commission alleged were sufficient in this case. Details inside.

An unusual insider trading prosecution brought under a provision of SOX (rather than Section 10(b) of the Exchange Act) suggests that prosecutors are seeking a "Plan B" in the wake of the Second Circuit's disruptive decision in U.S. v. Newman.

The Justice Department and SEC both announced high-profile cases on Tuesday against a large group of hackers and traders. Over a five-year period, the group allegedly carried out a scheme that involved hacking more than 150,000 confidential press releases from the computer networks of Marketwired, PR Newswire Association, and Business Wire to execute illegal trades. This stolen information allegedly generated more than $30 million in illegal profits. Details inside.

Last week, a former I.T. professional at law firm Wilson Sonsini Goodrich & Rosati, received a two-year sentence for a particularly brazen insider trading case scheme -- a scheme that foolishly ignored a huge “flashing stop sign,” according to the sentencing judge.

Facing an August 3 deadline to appeal the Second Circuit's Newman decision, the United States today filed a petition for a writ of certiorari with the U.S Supreme Court. The U.S. argued that the Second Circuit's decision "erroneously departed" from the Supreme Court’s decision in Dirks v. SEC.

Last week, the SEC announced the final resolution of an insider trading case that flowed from the most unusual of betrayals: information allegedly misappropriated from a senior executive who was confiding in a someone through their relationship at Alcoholics Anonymous.

Yesterday, the SEC filed a second insider trading case alleging that non-public information was leaked by a legal assistant whose law firm was advising on a merger involving Harleysville Group, Inc.

Last week, Judge Jed Rakoff denied Rajat Gupta's motion to vacate his conviction, finding that the landmark Newman case impacts tippee liability, not tipper liability.