Insider Trading

News & Analysis as of

SEC Alleges Insider Trading by Two Friends in Advance of the Acquisition of The Shaw Group Inc.

On April 3, the Securities and Exchange Commission brought a lawsuit against Walter Wagner and Alexander Osborn, alleging that the two friends realized almost $1 million in profits by illegally trading securities of The Shaw...more

Québec Court’s Decision on Insider Tipping Restrictions

On April 7, 2014, the Bureau de décision et de révision (BDR), which is the administrative tribunal that has jurisdiction under the Québec Securities Act, dismissed a claim by the Autorité des marchés financiers (AMF) for an...more

SEC Files Another Settled Insider Trading Case

Insider trading continues to be a key priority in the new get tough enforcement era. Last week closed with the filing of an insider trading action centered on the BP oil spill in the Gulf of Mexico. This week begins with...more

SEC Settles Insider Trading Case Tied to BP Oil Spill

The SEC filed a settled insider trading action against an employee of BP p.l.c. tied to the Deepwater Horizon oil spill in 2010. Specifically, the Commission claims that Keith Seilhan had material non-public information...more

Expect greater SEC scrutiny of activist hedge funds that share information or collaborate in advance of their trades

A recent Wall Street Journal article – “Activist Investors Often Leak Their Plans to a Favored Few” – focused attention on “activist” investors and stock analysts who (as part of their bullish or bearish campaigns for or...more

This Week In Securities Litigation (Week ending April 11, 2014)

Former hedge fund giant SAC Capital was sentenced this week. This concluded one of the most prominent insider trading cases. Under the terms of the sentence SAC Capital will no longer accept public funds....more

Give Me That Old-Time Insider Trading

Recently I had a question that required me to review Don Langevoort’s comprehensive insider trading treatise. It got me thinking about the roots of insider trading law. Specifically, the pre-SEC, pre-10b-5 insider trading...more

Honey, You Did What? SEC Charges Yet Another Spouse With Insider Trading

On March 31, 2014, the Securities and Exchange Commission brought insider trading charges against Ching Hwa Chen, the husband of a corporate insider, alleging that he misappropriated financial information from his wife and...more

Tax Alert: New Executive Compensation Regulations Clarify Timing of Taxation

The Internal Revenue Service recently published final regulations under Section 83 of the tax code. These regulations deal with the timing for taxation for grants of property (e.g., stock) that are subject to...more

This Week In Securities Litigation (Week ending April 4, 2014)

High speed trading and insider trading were key topics this week. Author Michael Lewis released a new book on high speed trading and, in an interview claimed the markets are “rigged.” The Commission focused on insider...more

An Insider Trading Reminder from the SEC

The SEC yesterday announced two separate cases against men who traded on confidential information they received from their wives about Silicon Valley technology companies....more

Case Illustrates Role Of 10b5-1 Plans In Securities Litigation

A Fourth Circuit case, Yates v. Municipal Mortgage & Equity, LLC (March 2014), recently examined the role of 10b5-1 plans in an alleged securities fraud case involving a financial statement restatement. To prevail on a Rule...more

Two SEC Insider Trading Cases Involving Spouses

The SEC filed two settled insider trading cases in which the husband is alleged to have misappropriated inside information from his wife. In each instance the husband understood he was not to trade. Yet in each case the...more

Gupta’s Efforts To Overturn Insider Trading Convictions Rejected

The Second Circuit Court of Appeals upheld the conviction of former Goldman Sachs director Rajat Gupta for illegal tipping. Mr. Gupta was convicted of conspiracy and three substantive counts of securities fraud, centered on...more

SEC Brings Lawsuit Against Former Carter’s Executive for Insider Trading and Tipping

On March 7, the Securities and Exchange Commission filed a complaint in the US District Court for the Northern District of Georgia against Richard Posey, former vice president of Operations of children’s clothing manufacturer...more

SEC – USAO Halt Serial Insider Trading Ring Despite Concealment Efforts

Trading repeatedly on inside information is likely to yield investigations by the SEC and the DOJ and charges by both even when steps are taken to carefully conceal your activity. That was the case for an insider trading ring...more

SEC May Have a New Weapon to Combat Insider Trading

The Second Circuit may have granted the Securities and Exchange Commission (SEC) a new weapon against insider trading. In SEC v. Contorinis, the court endorsed an expansive theory of disgorgement, allowing the SEC to require...more

SEC Brings New Charges Against SAC Analyst, Highlighting Risks to Employees

On Thursday, the SEC announced another set of insider trading charges against an employee of CR Intrinsic, an affiliate of the now-infamous hedge fund advisor SAC Capital Advisors. According to the SEC complaint, CR Intrinsic...more

Second Circuit Upholds SEC’s Authority to Obtain Disgorgement from Non-Trading Insider Profits Earned by Portfolio Fund from...

In SEC v. Contorinis, 2014 U.S. App. LEXIS 2927 (2d Cir. Feb. 18, 2014), the United States Court of Appeals for the Second Circuit upheld the authority of the Securities and Exchange Commission (“SEC”) to obtain...more

The SEC Will Take “Your” Money, Thanks

So let’s say you work for a hedge fund or some other financial institution that engages in proprietary trading , and you’re inclined to do some insider trading on your employer’s behalf. You make your trades, but you’re a...more

SEC Gets Split Verdict In Insider Trading Trial

The SEC obtained a split verdict from a jury against two brothers in an insider trading case. Specifically, the Commission prevailed on Exchange Act Section 14(e) claims against each but lost its Section 10(b) claims. The...more

New York Attorney General Announces Agreement with Firms to Stop Cooperating in “Insider Trading 2.0”

New York’s Attorney General Eric T. Schneiderman announced this week that he reached interim agreements with 18 Wall Street firms that they will not participate in surveys by elite investment firms that seek to get an...more

Insider Trading Investigations: What To Watch for in 2014

Christopher Clark is a partner at Latham & Watkins where he represents public companies, alternative investment entities such as hedge funds, and individuals in both criminal and civil investigations involving state and...more

Corporate and Financial Weekly Digest - Volume IX, Issue 9

In this issue: - CFTC Issues Advisory on Compliance with Gramm-Leach-Bliley Act Security Safeguards - SEC Issues Guidance on Aggregate Advisory Fee Rates for Multi-Manager Funds - Supreme Court Rules that...more

Oops! CalPERS Reportedly Violates Insider Trading Policy Again

Jon Ortiz, who writes The State Worker blog for The Sacramento Bee, recently reported that the California Public Employees Retirement System has again violated its insider trading policy by purchasing shares in an initial...more

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