Either the Securities and Exchange Commission has stepped up its enforcement of insider trading or it’s doing a better job of publicizing its enforcement.
Earlier this week, the SEC announced its case against Raj Rajaratnam and his New York-based hedge fund advisory firm Galleon Management LP.
On September 23, they charged Reza Saleh with insider trading in connection with Dell’s tender offer for Perot Systems. These charges were filed just two days after the date of the merger.
Last month, the SEC brought charges against Melissa Mahler for insider trading activity that happened in 2004. Ms. Mahler made the stupid mistake of lying to the feds about whether she had purchased the shares. That turns the insider trading case from a civil case to a criminal case. It’s also easier to prove, since all the feds can pull up the brokerage statement showing that she had purchased the shares.
There is also the SEC’s insider trading case against Mark Cuban. Even though the initial charges were thrown out in district court, they are appealing that decision to the Fifth Circuit Court of Appeals.
According to reports there are 10 More Insider Trading Arrests Coming Against Securities Professionals.
Perhaps the SEC is finding insider trading cases to be some easy wins? After being raked over the coals, maybe they see insider trading enforcement as an area that can get them some good publicity?
As we heard on The Wire: “We want dope on the table for the six o’clock news.”
References:
- SEC Charges Billionaire Hedge Fund Manager Raj Rajaratnam with Insider Trading – SEC Press Release
- SEC Complaint Against Rajaratnam, Galleon, and others – hosted on JD Supra
- A Zero Percent Chance of Success by Bruce Carton on Enforcement Action
- “Zero Percent Chance” Case Gets Worse by Bruce Carton on Enforcement Action
- US v. Mahler Information on False Statement Count – hosted on JD Supra
- A Quick and Effective SEC Enforcement Effort from Thomas O. Gorman of SEC Actions
- The Wire: Episode 11 The Hunt
- Report: 10 More Insider Trading Arrests Coming Against Securities Professionals from Bruce Carton on Securities Docket
- U.S. Plans to Charge 10 More After Rajaratnam Arrest by Joshua Gallu and David Scheer for Bloomberg