The Supreme Court announced this week that it will let stand the Second Circuit's landmark insider trading decision in U.S. v. Newman. Hillary Clinton, however, says that as President she would not do the same.
This week on the campaign trail, Clinton laid out many of her proposals that she says will "make sure there’s accountability on Wall Street." Included among these proposals is a specific response to the Newman decision. Clinton says she will introduce legislation to
[h]old individuals accountable when they commit insider trading. In response to a recent federal court ruling that upended long-standing enforcement practice, Clinton would propose legislation to clarify that insider trading prosecutions do not require knowledge that the source disclosed the inside information for personal benefit and to clarify what “personal benefit” means.
In addition, Clinton's proposals include several that she says are intended to improve the tools and resources of financial prosecutors and regulators such as the DOJ, SEC and CFTC. These include:
increasing funding generally for the DOJ, SEC, and CFTC to pursue financial misconduct;
Making funding for the SEC and CFTC "independent of annual appropriations in Congress—just like funding for all the other financial regulators—so that they can carry out their important missions without undue and inappropriate political interference." Clinton asserts on her website that self-funding is necessary because "Republicans and banking lobbyists have shown they are committed to using the appropriations process to compromise the SEC and CFTC’s core functions."
Increasing maximum penalties for SEC and CFTC enforcement actions. SEC penalties capped at $150,000 per violation for individuals and $725,000 per violation for corporations (in its in-house administrative proceedings) are inadequate, she says, and "need to be brought into the real world, through legislation that substantially increases these maximums—so that penalties can fully reflect the extent of the harm caused."
Extending the statute of limitations for major financial fraud to 10 years. The current period of five or six years, Clinton says, has proven "insufficient to account for the time-intensive nature of these prosecutions."