Editing Insider trading (section)

===United States===

====United States law====
Until the 21st century and the European Union's [[market abuse]] laws, the United States was the leading country in prohibiting insider trading made on the basis of material non-public information.<ref name="Ventoruzzo" /> Thomas Newkirk and Melissa Robertson of the SEC summarize the development of US insider trading laws.<ref name=Newkirk/> Insider trading has a base offense level of 8, which puts it in Zone&nbsp;A under the [[U.S. Sentencing Guidelines]]. This means that first-time offenders are eligible to receive probation rather than incarceration.<ref>{{cite web|title=U.S.S.G. §2B1.4 |url=http://www.ussc.gov/2009guid/2b1_4.htm  |url-status=dead |archive-url=https://web.archive.org/web/20100618144017/http://www.ussc.gov/2009guid/2b1_4.htm |archive-date=2010-06-18 }}</ref>

====Statutory====
U.S. insider trading prohibitions are based on English and American common law prohibitions against fraud. In 1909, well before the Securities Exchange Act was passed, the [[United States Supreme Court]] ruled that a corporate director who bought that company's stock when he knew the stock's price was about to increase committed fraud by buying but not disclosing his inside information.

Section 15 of the [[Securities Act of 1933]]<ref>{{cite web |url=https://www.sec.gov/about/laws/sa33.pdf |title=Securities Exchange Act of 1933 |access-date=December 21, 2011 |archive-date=January 11, 2012 |archive-url=https://web.archive.org/web/20120111084531/http://www.sec.gov/about/laws/sa33.pdf |url-status=live }}</ref> contained prohibitions of fraud in the sale of securities, later greatly strengthened by the [[Securities Exchange Act of 1934]].<ref>{{cite web |url=https://www.sec.gov/about/laws/sea34.pdf |title=Securities Exchange Act of 1934 |access-date=December 21, 2011 |archive-date=January 14, 2012 |archive-url=https://web.archive.org/web/20120114052905/http://www.sec.gov/about/laws/sea34.pdf |url-status=live }}</ref>

Section 16(b) of the Securities Exchange Act of 1934 prohibits short-swing profits (from any purchases and sales within any six-month period) made by corporate directors, officers, or stockholders owning more than 10% of a firm's shares. Under Section 10(b) of the 1934 Act, [[SEC Rule 10b-5]], prohibits fraud related to securities trading.

The Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988 place penalties for illegal insider trading as high as three times the amount of profit gained or loss avoided from illegal trading.<ref>{{cite web|author=Thomsen LT|url=https://www.sec.gov/news/testimony/2006/ts092606lct.htm|title=Testimony Concerning Insider Trading|publisher=SEC|access-date=December 21, 2011|archive-date=September 21, 2018|archive-url=https://web.archive.org/web/20180921022213/https://www.sec.gov/news/testimony/2006/ts092606lct.htm|url-status=live}}</ref>

====SEC regulations====
SEC [[Regulation Fair Disclosure|regulation FD ("Fair Disclosure")]] requires that if a company intentionally discloses material non-public information to one person, it must simultaneously disclose that information to the public at large. In the case of unintentional disclosure of material non-public information to one person, the company must make a public disclosure "promptly".<ref name="Harris"/>{{rp|586}}

Insider trading, or similar practices, are also regulated by the SEC under its rules on takeovers and tender offers under the [[Williams Act]].

====Court decisions====
Much of the development of insider trading law has resulted from court decisions.

In 1909, the Supreme Court of the United States ruled in ''Strong v. Repide''<ref>{{cite web |url=http://supreme.justia.com/us/213/419/ |title=Strong v. Repide – 213 U.S. 419 (1909) :: Justia US Supreme Court Center |publisher=Supreme.justia.com |access-date=August 20, 2012 |archive-date=January 7, 2010 |archive-url=https://web.archive.org/web/20100107050911/http://supreme.justia.com/us/213/419/ |url-status=live }}</ref> that a director who expects to act in a way that affects the value of shares cannot use that knowledge to acquire shares from those who do not know of the expected action. Even though, in general, ordinary relations between directors and shareholders in a business corporation are not of such a fiduciary nature as to make it the duty of a director to disclose to a shareholder general knowledge regarding the value of the shares of the company before he purchases any from a shareholder, some cases involve special facts that impose such duty.

In 1968, the [[Second Circuit Court of Appeals]] advanced a "level playing field" theory of insider trading in ''[[SEC v. Texas Gulf Sulphur Co.|SEC v. Texas Gulf Sulphur Co]].''<ref>''[https://scholar.google.com/scholar_case?case=8550821722818303653 Securities and Exchange Com'n v. Texas Gulf Sulphur Co.] {{Webarchive|url=https://web.archive.org/web/20160205144453/http://scholar.google.com/scholar_case?case=8550821722818303653 |date=2016-02-05 }}'', 401 F. 2d 833 (2d Cir. 1968)</ref> The court stated that anyone in possession of inside information must either disclose the information or refrain from trading. Officers of the [[Texas Gulf Sulfur Company|Texas Gulf Sulphur Company]] had used inside information about the discovery of the [[Kidd Mine]] to make profits by buying shares and call options on company stock.<ref name=brooks>{{cite magazine|last=Brooks|first=John|title=A Reasonable Amount of Time|magazine=The New Yorker|date=November 9, 1968|pages=160–188}}</ref>

In 1984, the Supreme Court of the United States ruled in the case of ''Dirks v. Securities and Exchange Commission''<ref>{{cite web |url=http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=463&invol=646 |title=FindLaw &#124; Cases and Codes |publisher=Caselaw.lp.findlaw.com |access-date=August 20, 2012 |archive-date=May 20, 2011 |archive-url=https://web.archive.org/web/20110520004927/http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=463&invol=646 |url-status=live }}</ref> that tippees (receivers of second-hand information) are liable if they had reason to believe that the tipper had breached a fiduciary duty in disclosing confidential information. One such example would be if the tipper received any personal benefit from the disclosure, thereby breaching his or her duty of loyalty to the company. In ''Dirks'', the "tippee" received confidential information from an insider, a former employee of a company. The reason the insider disclosed the information to the tippee, and the reason the tippee disclosed the information to third parties, was to blow the whistle on massive fraud at the company. As a result of the tippee's efforts the fraud was uncovered, and the company went into bankruptcy. But, while the tippee had given the "inside" information to clients who made profits from the information, the U.S. Supreme Court ruled that the tippee could not be held liable under the federal securities laws—for the simple reason that the insider from whom he received the information was not releasing the information for an improper purpose (a personal benefit), but rather for the purpose of exposing the fraud. The Supreme Court ruled that the tippee could not have been aiding and abetting a securities law violation committed by the insider—for the simple reason that no securities law violation had been committed by the insider.

(In 2019, in the case of ''United States v. Blaszczak'', the U.S. Court of Appeals for the Second Circuit ruled that the “personal-benefit” test announced in ''Dirks'' does not apply to Title 18 fraud statutes, such as 18 USC 1348.<ref>{{Cite web|url=https://www.govinfo.gov/content/pkg/USCOURTS-ca2-18-02867/pdf/USCOURTS-ca2-18-02867-0.pdf|title=United States v. Blaszczak (2d Cir.)|access-date=2022-07-18|archive-date=2022-07-18|archive-url=https://web.archive.org/web/20220718112402/https://www.govinfo.gov/content/pkg/USCOURTS-ca2-18-02867/pdf/USCOURTS-ca2-18-02867-0.pdf|url-status=live}}</ref><ref>{{Cite news |date=2019-12-30 |title='King of Political Intelligence' Insider Conviction Upheld |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2019-12-30/-king-of-political-intelligence-fails-to-overturn-insider-case |access-date=2022-07-18 |archive-date=2021-02-02 |archive-url=https://web.archive.org/web/20210202164102/https://www.bloomberg.com/news/articles/2019-12-30/-king-of-political-intelligence-fails-to-overturn-insider-case |url-status=live }}</ref>)

In ''Dirks'', the Supreme Court also defined the concept of "constructive insiders", who are lawyers, investment bankers, and others who receive confidential information from a corporation while providing services to the corporation. Constructive insiders are also liable for insider trading violations if the corporation expects the information to remain confidential, since they acquire the fiduciary duties of the true insider.

The next expansion of insider trading liability came in ''SEC vs. Materia''<ref>{{cite web |url=http://leagle.com/decision/1984942745F2d197_1924.xml/S.E.C.%20v.%20MATERIA |title=S.E.C. V. Materia |publisher=Leagle.com |access-date=March 3, 2014 |archive-date=January 3, 2017 |archive-url=https://web.archive.org/web/20170103000348/http://www.leagle.com/decision/1984942745F2d197_1924.xml/S.E.C. |url-status=dead }}</ref> 745 F.2d 197 (2d Cir. 1984), the case that first introduced the misappropriation theory of liability for insider trading. Materia, a financial printing firm proofreader, and clearly not an insider by any definition, was found to have determined the identity of takeover targets based on proofreading tender offer documents in the course of his employment. After a two-week trial, the district court found him liable for insider trading, and the Second Circuit Court of Appeals affirmed holding that the theft of information from an employer, and the use of that information to purchase or sell securities in another entity, constituted a fraud in connection with the purchase or sale of a securities. The misappropriation theory of insider trading was born, and liability further expanded to encompass a larger group of outsiders.

In ''United States v. Carpenter''<ref>{{cite web |url=http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=484&invol=19 |title=FindLaw &#124; Cases and Codes |publisher=Caselaw.lp.findlaw.com |access-date=August 20, 2012 |archive-date=September 7, 2011 |archive-url=https://web.archive.org/web/20110907221113/http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=484&invol=19 |url-status=live }}</ref> (1986) the U.S. Supreme Court cited an earlier ruling while unanimously upholding mail and wire fraud convictions for a defendant who received his information from a journalist rather than from the company itself. The journalist [[R. Foster Winans]] was also convicted, on the grounds that he had misappropriated information belonging to his employer, ''[[The Wall Street Journal]]''. In that widely publicized case, Winans traded in advance of "Heard on the Street" columns appearing in the Journal.<ref>{{cite web |first=Christopher |last=Cox |author-link=Christopher Cox |publisher=U.S. Securities and Exchange Commission |url=https://www.sec.gov/news/speech/2006/spch050106cc.htm |title=Speech by SEC Chairman: Remarks at the Annual Meeting of the Society of American Business Editors and Writers |access-date=2017-09-01 |archive-date=2016-06-08 |archive-url=https://web.archive.org/web/20160608143447/http://www.sec.gov/news/speech/2006/spch050106cc.htm |url-status=live }}</ref>

The Court stated in ''Carpenter'': "It is well established, as a general proposition, that a person who acquires special knowledge or information by virtue of a confidential or fiduciary relationship with another is not free to exploit that knowledge or information for his own personal benefit but must account to his principal for any profits derived therefrom."

However, in upholding the securities fraud (insider trading) convictions, the justices were evenly split.

In 1997, the U.S. Supreme Court adopted the misappropriation theory of insider trading in ''United States v. O'Hagan'',<ref>{{cite web |url=https://www.law.cornell.edu/supct/html/96-842.ZO.html |title=United States v. O'Hagan, 117 S.Ct. 2199, 138 L.Ed.2d 724 (1997) |publisher=Law.cornell.edu |access-date=August 20, 2012 |archive-date=January 7, 2018 |archive-url=https://web.archive.org/web/20180107174916/https://www.law.cornell.edu/supct/html/96-842.ZO.html |url-status=live }}</ref> 521 U.S. 642, 655 (1997). O'Hagan was a partner in a law firm representing [[Diageo|Grand Metropolitan]], while it was considering a tender offer for [[Pillsbury Company]]. O'Hagan used this inside information by buying call options on Pillsbury stock, resulting in profits of over $4.3&nbsp;million. O'Hagan claimed that neither he nor his firm owed a fiduciary duty to Pillsbury, so he did not commit fraud by purchasing Pillsbury options.<ref>{{cite web |url=http://www.law.com/regionals/ca/briefing/wilson/wilson21.html |title=Law.com |publisher=Law.com |date=June 25, 1997 |access-date=December 21, 2011 |archive-date=November 4, 2009 |archive-url=https://web.archive.org/web/20091104140351/http://www.law.com/regionals/ca/briefing/wilson/wilson21.html |url-status=live }}</ref>

The Court rejected O'Hagan's arguments and upheld his conviction.

The "misappropriation theory" holds that a person commits fraud "in connection with" a securities transaction and thereby violates 10(b) and Rule 10b-5, when he misappropriates confidential information for securities trading purposes, in breach of a duty owed to the source of the information. Under this theory, a fiduciary's undisclosed, self-serving use of a principal's information to purchase or sell securities, in breach of a duty of loyalty and confidentiality, defrauds the principal of the exclusive use of the information. In lieu of premising liability on a fiduciary relationship between company insider and purchaser or seller of the company's stock, the misappropriation theory premises liability on a fiduciary-turned-trader's deception of those who entrusted him with access to confidential information.

The Court specifically recognized that a corporation's information is its property: "A company's confidential information&nbsp;... qualifies as property to which the company has a right of exclusive use. The undisclosed misappropriation of such information in violation of a fiduciary duty&nbsp;... constitutes fraud akin to embezzlement – the fraudulent appropriation to one's own use of the money or goods entrusted to one's care by another."

In 2000, the SEC enacted [[SEC Rule 10b5-1]], which defined trading "on the basis of" inside information as any time a person trades while aware of material nonpublic information. It is no longer a defense for one to say that one would have made the trade anyway. The rule also created an [[affirmative defense]] for pre-planned trades.

In ''[[Chip Skowron|Morgan Stanley v. Skowron]]'', 989 F. Supp. 2d 356 (S.D.N.Y. 2013), applying New York's [[faithless servant]] doctrine, the court held that a hedge fund's [[portfolio manager]] engaging in insider trading in violation of his company's code of conduct, which also required him to report his misconduct, must repay his employer the full $31&nbsp;million his employer paid him as compensation during his period of faithlessness.<ref>{{Cite book|url=https://books.google.com/books?id=3RaGDwAAQBAJ&q=%22faithless+servant%22&pg=PA472|title=Employment Law: Private Ordering and Its Limitations|first1=Timothy P.|last1=Glynn|first2=Rachel S.|last2=Arnow-Richman|first3=Charles A.|last3=Sullivan|date= 2019|publisher=Wolters Kluwer Law & Business|via=Google Books|isbn=9781543801064}}</ref><ref name="auto4">{{cite web|url=https://www.ibtimes.co.uk/faithless-ex-morgan-stanley-fund-manager-ordered-repay-31m-former-employer-1429819|author=Jerin Matthew|title='Faithless' Ex-Morgan Stanley Fund Manager Ordered to Repay $31m to Former Employer|date=December 20, 2013|website=International Business Times UK|access-date=August 6, 2019|archive-date=July 6, 2019|archive-url=https://web.archive.org/web/20190706143933/https://www.ibtimes.co.uk/faithless-ex-morgan-stanley-fund-manager-ordered-repay-31m-former-employer-1429819|url-status=live}}</ref><ref>{{cite web|url=https://dealbook.nytimes.com/2013/12/23/the-huge-costs-of-being-a-faithless-servant/|title=The Huge Costs of Being a 'Faithless Servant'|first=Peter J.|last=Henning|date=December 23, 2013|website=New York Times DealBook|access-date=August 6, 2019|archive-date=June 24, 2019|archive-url=https://web.archive.org/web/20190624175425/https://dealbook.nytimes.com/2013/12/23/the-huge-costs-of-being-a-faithless-servant/|url-status=live}}</ref><ref>{{cite web|url=https://www.greenwichtime.com/news/article/Morgan-Stanley-seeks-10-2-million-from-convicted-4193127.php|title=Morgan Stanley seeks $10.2 million from convicted former trader|date=January 15, 2013|work=GreenwichTime|access-date=August 6, 2019|archive-date=June 27, 2019|archive-url=https://web.archive.org/web/20190627172218/https://www.greenwichtime.com/news/article/Morgan-Stanley-seeks-10-2-million-from-convicted-4193127.php|url-status=live}}</ref> The court called the insider trading the "ultimate abuse of a portfolio manager's position".<ref name="auto4"/> The judge also wrote: "In addition to exposing Morgan Stanley to government investigations and direct financial losses, Skowron's behavior damaged the firm's reputation, a valuable corporate asset."<ref name="auto4"/>

In 2014, in the case of ''United States v. Newman'', the United States Court of Appeals for the Second Circuit cited the Supreme Court's decision in ''Dirks'', and ruled that for a "tippee" (a person who used information they received from an insider) to be guilty of insider trading, the tippee must have been aware not only that the information was insider information, but must also have been aware that the insider released the information for an improper purpose (such as a personal benefit). The Court concluded that the insider's breach of a fiduciary duty not to release confidential information—in the absence of an improper purpose on the part of the insider—is not enough to impose criminal liability on either the insider or the tippee.<ref name="United States v 2014"/>

In 2016, in the case of ''[[Salman v. United States]]'', the U.S. Supreme Court held that the benefit a tipper must receive as predicate for an insider-trader prosecution of a tippee need not be pecuniary, and that giving a 'gift' of a tip to a family member is presumptively an act for the personal though intangible benefit of the tipper.<ref name="Savage">{{Cite news|last=Savage |first=David G. |date=6 December 2016 |title=Supreme Court affirms broad reach of insider-trading laws |newspaper=The Los Angeles Times |url=https://www.latimes.com/business/la-fi-supreme-court-insider-trading-20161206-story.html |archive-url=https://web.archive.org/web/20161207135034/http://www.latimes.com/business/la-fi-supreme-court-insider-trading-20161206-story.html |archive-date=7 December 2016 |url-status=live |df=dmy}}</ref>

====By members of Congress====
Members of the [[US Congress]] are not exempt from the laws that ban insider trading.<ref>{{cite news |first=Robert |last=Anello |title=How Senators May Have Avoided Insider Trading Charges |url=https://www.forbes.com/sites/insider/2020/05/26/how-senators-may-have-avoided-insider-trading-charges/?sh=28a55f0227ba |work=[[Forbes]] |date=May 26, 2020 |access-date=January 26, 2023 |archive-date=January 26, 2023 |archive-url=https://web.archive.org/web/20230126151143/https://www.forbes.com/sites/insider/2020/05/26/how-senators-may-have-avoided-insider-trading-charges/?sh=28a55f0227ba |url-status=live }}</ref> Because they generally do not have a confidential relationship with the source of the information they receive, however, they do not meet the usual definition of an "insider".<ref>[https://www.cbsnews.com/news/congress-trading-stock-on-inside-information/ Congress: Trading stock on inside information?], CBS News, November 13, 2011</ref> House of Representatives rules<ref>{{cite web |url=http://oce.house.gov/pdf/2008_House_Ethics_Manual.pdf |title=House Ethics Manual (2008) |access-date=December 21, 2011 |archive-url=https://web.archive.org/web/20120118033300/http://oce.house.gov/pdf/2008_House_Ethics_Manual.pdf |archive-date=2012-01-18 |url-status=dead }}</ref> may however consider congressional insider trading unethical. A 2004 study found that stock sales and purchases by senators outperformed the market by 12.3% per year.<ref>{{cite journal|doi=10.1017/S0022109000003161 | volume=39 | issue=4 | title=Abnormal Returns from the Common Stock Investments of the U.S. Senate | year=2004 | journal=Journal of Financial and Quantitative Analysis | page=661 | last1=Ziobrowski | first1=Alan J. | last2=Cheng | first2=Ping | last3=Boyd | first3=James W. | last4=Ziobrowski | first4=Brigitte J.| s2cid=16221428 }}</ref> [[Peter Schweizer]] points out several examples of insider trading by members of Congress, including action taken by [[Spencer Bachus]] following a private, behind-the-doors meeting on the evening of September 18, 2008 when [[Hank Paulson]] and [[Ben Bernanke]] informed members of Congress about the issues due to the [[2008 financial crisis]], Bachus then shorted stocks the next morning and cashed in his profits within a week.<ref>{{cite web| url=http://www.businessinsider.com/the-congress-insider-trading-scandal-is-a-disgrace-rep-spencer-bachus-should-resign-immediately-2011-11| author=Blodget, Henry| title=The Congress Insider Trading Scandal Is Outrageous: Rep. Spencer Bachus Should Resign In Disgrace| website=Business Insider| date=November 14, 2011| access-date=November 17, 2011| author-link=Henry Blodget| archive-date=October 9, 2018| archive-url=https://web.archive.org/web/20181009090316/https://www.businessinsider.com/the-congress-insider-trading-scandal-is-a-disgrace-rep-spencer-bachus-should-resign-immediately-2011-11| url-status=live}}</ref> Also attending the same meeting were Senator [[Dick Durbin]] and House Speaker [[John Boehner]]; the same day (trade effective the next day), Durbin sold mutual-fund shares worth $42,696, and reinvested it all with Warren Buffett. Also the same day (trade effective the next day), Boehner cashed out of an equity mutual fund.<ref>{{cite web|title=Lawmakers' inside advantage to trading |date=September 17, 2009 |url=http://marketplace.publicradio.org/display/web/2009/09/17/pm-inside-dope/ |publisher=Marketplace.publicradio.org |access-date=September 20, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20110812110541/http://marketplace.publicradio.org/display/web/2009/09/17/pm-inside-dope/ |archive-date=August 12, 2011 }}</ref><ref>{{cite web |title=Durbin Invests With Buffett After Funds Sale Amid Market Plunge |date=June 13, 2008 |url=https://www.bloomberg.com/apps/news?pid=20601087&sid=aQyYKbwMItyc |publisher=Bloomberg.com |access-date=September 14, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20080920014104/http://www.bloomberg.com/apps/news?pid=20601087 |archive-date=September 20, 2008 }}</ref>

In May 2007, a bill entitled the Stop Trading on Congressional Knowledge Act, or [[STOCK Act]] was introduced that would hold congressional and federal employees liable for stock trades they made using information they gained through their jobs and also regulate analysts or political intelligence firms that research government activities.<ref>{{cite news |first=Daniel |last=Gross |author-link=Daniel Gross (journalist) |title=Insider Trading, Congressional-Style |url=http://www.slate.com/id/2166664/fr/rss/%20slate.com |work=[[Slate (magazine)|Slate]] |publisher=[[The Washington Post Company]] |date=May 21, 2007 |access-date=May 29, 2007 |archive-url=https://web.archive.org/web/20070930231755/http://www.slate.com/id/2166664/fr/rss/%20slate.com |archive-date=September 30, 2007 |url-status=dead }}</ref> The [[STOCK Act]] was enacted on April 4, 2012. As of 2021, in the approximately nine month period up to September 2021, Senate and House members disclosed 4,000 trades worth at least $315&nbsp;million of stocks and bonds.<ref>{{cite web|url=https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trading-stocks-by-watching-what-members-of-congress-do|title=TikTokers Are Trading Stocks By Copying What Members Of Congress Do|work=www.npr.org|author=All Things Considered|date=September 21, 2021|accessdate=January 1, 2022|archive-date=January 3, 2022|archive-url=https://web.archive.org/web/20220103031314/https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trading-stocks-by-watching-what-members-of-congress-do|url-status=live}}</ref>

=====2020 congressional insider trading scandal=====
{{Excerpt|2020 congressional insider trading scandal|paragraphs=1|only=paragraphs}}

====Further====
[[Anil Kumar]], a senior partner at management consulting firm [[McKinsey & Company]], pleaded guilty in 2010 to insider trading in a "descent from the pinnacle of the business world".<ref name = "wsj-motives">Pulliam, Susan and Michael Rothfeld. [https://www.wsj.com/articles/SB10001424052748703327404576195100112867600 "Motive for Stock Leak Can Be Respect, Love"] {{Webarchive|url=https://web.archive.org/web/20190819060107/https://www.wsj.com/articles/SB10001424052748703327404576195100112867600 |date=2019-08-19 }}. ''The Wall Street Journal.'' 14 March 2011.</ref>

[[Chip Skowron]], a [[hedge fund]] co-[[portfolio manager]] of FrontPoint Partners LLC's [[health care]] funds, was convicted of insider trading in 2011, for which he served five years in prison. He had been tipped off by a consultant to a company that the company was about to make a negative announcement regarding its [[clinical trial]] for a drug.<ref name="reuters.com">{{cite news|url=https://www.reuters.com/article/frontpoint-idUSN0221173320101102|title=Factbox - Facts about FrontPoint's Chip Skowron|date=2 November 2010|work=Reuters|access-date=20 August 2019|archive-date=24 June 2019|archive-url=https://web.archive.org/web/20190624175424/https://www.reuters.com/article/frontpoint-idUSN0221173320101102|url-status=live}}</ref><ref name="institutionalinvestor.com1">Taub, Stephen (13 April 2011). [https://www.institutionalinvestor.com/article/b150y6xyrjps97/ex-frontpoint-manager-charged-with-securities-fraud "Ex-FrontPoint Manager Charged With Securities Fraud,"] {{Webarchive|url=https://web.archive.org/web/20190820113922/https://www.institutionalinvestor.com/article/b150y6xyrjps97/ex-frontpoint-manager-charged-with-securities-fraud |date=2019-08-20 }} ''Institutional Investor''.</ref><ref>Wachtell, Katya (21 June 2011). [https://www.businessinsider.com/chip-skowron-frontpoint-healthcare-charged-with-insider-trading-2011-6 "Ex-FrontPoint Manager Chip Skowron Is Still In Discussions With Prosecutors About His Charges,"<!-- Bot generated title -->] {{Webarchive|url=https://web.archive.org/web/20190626032119/https://www.businessinsider.com/chip-skowron-frontpoint-healthcare-charged-with-insider-trading-2011-6 |date=2019-06-26 }} ''Business Insider''.</ref><ref>Bray, Chad (16 August 2011). [https://www.ft.com/content/e69c31a0-c77e-11e0-9cac-00144feabdc0 "Ex-FrontPoint manager pleads guilty,"] {{Webarchive|url=https://web.archive.org/web/20191007102800/https://www.ft.com/content/e69c31a0-c77e-11e0-9cac-00144feabdc0 |date=2019-10-07 }} ''Financial Times''.</ref> At first Skowron denied the charges against him, and his defense attorney said he would plead not guilty, saying "We look forward to responding to the allegations more fully in court at the appropriate time".<ref name="businessinsider.com"/><ref name=autogenerated1>Neumeister, Larry (13 April 2011). [https://www.deseretnews.com/article/700126874/Conn-doctor-accused-of-hedge-fund-insider-trading.html "Conn. doctor accused of hedge fund insider trading,"<!-- Bot generated title -->] {{Webarchive|url=https://web.archive.org/web/20190705023026/https://www.deseretnews.com/article/700126874/Conn-doctor-accused-of-hedge-fund-insider-trading.html |date=2019-07-05 }} ''Deseret News''.</ref><ref>Witt, Emily (13 April 2011). [https://observer.com/2011/04/skowron-will-plead-not-guilty/ "Skowron Will Plead Not Guilty,"<!-- Bot generated title -->] {{Webarchive|url=https://web.archive.org/web/20190626032109/https://observer.com/2011/04/skowron-will-plead-not-guilty/ |date=2019-06-26 }} ''Observer''.</ref> However, after the consultant charged with tipping him off pleaded guilty, he changed his position, and admitted his guilt.<ref name="businessinsider.com">{{cite web|url=https://www.businessinsider.com/meet-chip-skowron-2010-11|title=Meet Chip Skowron: The Health-Care Fund Manager At The Center Of The FrontPoint Insider Trading Scandal|website=Business Insider|author=Wachtell, Kaya|date=22 November 2010|access-date=20 August 2019|archive-date=24 June 2019|archive-url=https://web.archive.org/web/20190624195100/https://www.businessinsider.com/meet-chip-skowron-2010-11|url-status=live}}</ref>

[[Rajat Gupta]], who had been managing partner of McKinsey & Co. and a director at [[Goldman Sachs]] Group Inc. and [[Procter & Gamble]] Co., was convicted by a federal jury in 2012 and sentence to two years in prison for leaking inside information to [[hedge fund]] manager [[Raj Rajaratnam]] who was sentenced to 11 years in prison. The case was prosecuted by the office of United States Attorney for the Southern District of New York [[Preet Bharara]].<ref>{{cite news|last=McCool|first=Grant|title=Rajat Gupta guilty of insider trading|url=https://www.reuters.com/article/us-goldman-gupta-idUSBRE85E0Z320120615|work=Reuters|access-date=June 15, 2012|author2=Basil Katz|date=June 15, 2012|archive-date=June 16, 2012|archive-url=https://web.archive.org/web/20120616073410/http://www.reuters.com/article/2012/06/15/us-goldman-gupta-idUSBRE85E0Z320120615|url-status=live}}</ref>

[[Mathew Martoma]], former hedge fund trader and portfolio manager at [[S.A.C. Capital Advisors]], was accused of generating possibly the largest single insider trading transaction profit in history at a value of $276&nbsp;million.<ref name="Indian-origin fund manager indicted in insider trading"/> He was convicted in February 2014, and is serving a nine-year prison sentence.<ref name="Indian-origin fund manager indicted in insider trading">{{cite web |url=http://www.rediff.com/money/report/indian-origin-fund-manager-indicted-in-insider-trading/20121225.htm |title=Indian-origin fund manager indicted in insider trading - Rediff.com Business |work=Rediff.com |date=2012-12-26 |access-date=2014-03-03 |archive-date=2014-03-02 |archive-url=https://web.archive.org/web/20140302012022/http://www.rediff.com/money/report/indian-origin-fund-manager-indicted-in-insider-trading/20121225.htm |url-status=live }}</ref><ref name="Steve">{{cite news  |last=Stevenson  |first=Alexandra  |title=Ex-SAC Trader Convicted of Securities Fraud  |url=https://dealbook.nytimes.com/2014/02/06/former-sac-trader-found-guilty-of-insider-trading/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1  |newspaper=[[The New York Times]]  |date=February 7, 2014  |author2=Goldstein, Matthew  |page=A1  |access-date=August 19, 2019  |archive-date=August 2, 2020  |archive-url=https://web.archive.org/web/20200802094541/https://dealbook.nytimes.com/2014/02/06/former-sac-trader-found-guilty-of-insider-trading/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1  |url-status=live  }}</ref>

With the guilty plea by Perkins Hixon in 2014 for insider trading from 2010 to 2013 while at [[Evercore Partners]], Bharara said in a press release that 250 defendants whom his office had charged since August 2009 had now been convicted.<ref>Pital, Sisal S., [http://www.marketwatch.com/story/ex-evercore-director-guilty-of-insider-trading-2014-04-03 "Ex-Evercore director guilty of insider trading"] {{Webarchive|url=https://web.archive.org/web/20180108062751/https://www.marketwatch.com/story/ex-evercore-director-guilty-of-insider-trading-2014-04-03 |date=2018-01-08 }}, ''[[MarketWatch]]'', April 3, 2014. Retrieved April 3, 2014.</ref>

On December 10, 2014, a federal appeals court overturned the insider trading convictions of two former [[Hedge fund|hedge fund traders]], Todd Newman and [[Anthony Chiasson]], based on the "erroneous" instructions given to jurors by the trial judge.<ref name="NYT-20141210-BR">{{cite news |last1=Protess |first1=Ben |last2=Goldstein |first2=Matthew |title=Appeals Court Overturns 2 Insider Trading Convictions |url=https://dealbook.nytimes.com/2014/12/10/appeals-court-overturns-2-insider-trading-convictions/ |date=December 10, 2014 |work=[[The New York Times]] |access-date=December 10, 2014 |archive-date=June 14, 2018 |archive-url=https://web.archive.org/web/20180614194751/https://dealbook.nytimes.com/2014/12/10/appeals-court-overturns-2-insider-trading-convictions/ |url-status=live }}</ref> The decision was expected to affect the appeal of the separate insider-trading conviction of former SAC Capital portfolio manager Michael Steinberg<ref>Matthews, Christopher M., [https://www.wsj.com/articles/appeals-court-overturns-two-insider-trading-convictions-1418224146 "Court Overturns Insider-Trading Convictions, a Blow to Justice Department"] {{Webarchive|url=https://web.archive.org/web/20180116174823/https://www.wsj.com/articles/appeals-court-overturns-two-insider-trading-convictions-1418224146 |date=2018-01-16 }}, Wall Street ''Journal'', December 10, 2014. Retrieved 2016-08-17.</ref> and the U.S. Attorney<ref>Matthews, Christopher M., and Aruna Viswanatha, [https://www.wsj.com/articles/u-s-attorney-moves-to-dismiss-insider-trading-charges-in-sac-capital-advisors-case-1445545210 "U.S. Attorney Aims to Dismiss Insider Trading Charges in SAC Capital Advisors Case"] {{Webarchive|url=https://web.archive.org/web/20180117140826/https://www.wsj.com/articles/u-s-attorney-moves-to-dismiss-insider-trading-charges-in-sac-capital-advisors-case-1445545210 |date=2018-01-17 }}, Wall Street ''Journal'', October 22, 2015. Retrieved 2016-08-17.</ref> and the SEC<ref>Copeland, Rob, [https://blogs.wsj.com/law/2015/11/25/sec-drops-civil-insider-trading-case-against-ex-sacs-steinberg/ "SEC Drops Civil Insider Trading Case Against Ex-SAC's Steinberg"] {{Webarchive|url=https://web.archive.org/web/20180107120155/https://blogs.wsj.com/law/2015/11/25/sec-drops-civil-insider-trading-case-against-ex-sacs-steinberg/ |date=2018-01-07 }}, Wall Street ''Journal'', November 25, 2015. Retrieved 2016-08-17.</ref> in 2015 did drop their cases against Steinberg and others.

In 2016, Sean Stewart, a former managing director at [[Perella Weinberg Partners]] LP and vice president at [[JPMorgan Chase]], was convicted on allegations he [[Tipster#Stocks and shares|tipped]] his father on pending health-care deals. The father, Robert Stewart, previously had pleaded guilty but did not testify during his son's trial. It was argued that by way of compensation for the tip, the father had paid more than $10,000 for Sean's wedding photographer.<ref>Matthews, Christopher M., [https://www.wsj.com/articles/former-health-care-investment-banker-convicted-of-tipping-his-father-on-deals-1471455158 "Former Health-Care Investment Banker Convicted of Tipping His Father on Deals"] {{Webarchive|url=https://web.archive.org/web/20180107232902/https://www.wsj.com/articles/former-health-care-investment-banker-convicted-of-tipping-his-father-on-deals-1471455158 |date=2018-01-07 }}, Wall Street ''Journal'', August 17, 2016. Retrieved 2016-08-17.</ref>

In 2017, [[Billy Walters (gambler)|Billy Walters]], Las Vegas sports bettor, was convicted of making $40&nbsp;million on private information of Dallas-based dairy processing company [[Dean Foods]], and sentenced to five years in prison. Walters's source, company director Thomas C. Davis employing a prepaid cell phone and sometimes the code words "Dallas Cowboys" for Dean Foods, helped him from 2008 to 2014 realize profits and avoid losses in the stock, the federal jury found. Golfer [[Phil Mickelson]] "was also mentioned during the trial as someone who had traded in Dean Foods shares and once owed nearly $2&nbsp;million in gambling debts to" Walters. Mickelson "made roughly $1&nbsp;million trading Dean Foods shares; he agreed to forfeit those profits in a related civil case brought by the Securities and Exchange Commission". Walters appealed the verdict, but in December 2018 his conviction was upheld by the 2nd U.S. Circuit Court of Appeals in Manhattan.<ref>Moynihan, Colin, and Liz Moyer, [https://www.nytimes.com/2017/04/07/business/dealbook/william-t-walters-famed-sports-bettor-is-guilty-in-insider-trading-case.html "William T. Walters, Famed Sports Bettor, Is Guilty in Insider Trading Case"] {{Webarchive|url=https://web.archive.org/web/20171216221138/https://www.nytimes.com/2017/04/07/business/dealbook/william-t-walters-famed-sports-bettor-is-guilty-in-insider-trading-case.html |date=2017-12-16 }}, ''The New York Times'', April 7, 2017. Retrieved 2017-04-07.</ref><ref>{{Cite news| url=https://www.reuters.com/article/us-usa-insidertrading-walters/las-vegas-gambler-walters-loses-insider-trading-appeal-idUSKBN1O328K| title=Las Vegas gambler Walters loses insider trading appeal| newspaper=Reuters| date=4 December 2018| access-date=19 August 2019| archive-date=19 August 2019| archive-url=https://web.archive.org/web/20190819054400/https://www.reuters.com/article/us-usa-insidertrading-walters/las-vegas-gambler-walters-loses-insider-trading-appeal-idUSKBN1O328K| url-status=live}}</ref>

In 2018, David Blaszczak, the "king of political intelligence",<ref>{{Cite news |last=Viswanatha |first=Brody Mullins and Aruna |date=2016-08-18 |title=The King of 'Political Intelligence' Faces a Reckoning |language=en-US |work=Wall Street Journal |url=http://www.wsj.com/articles/the-king-of-political-intelligence-faces-a-reckoning-1471530464 |access-date=2022-07-07 |issn=0099-9660 |archive-date=2022-07-07 |archive-url=https://web.archive.org/web/20220707151213/https://www.wsj.com/articles/the-king-of-political-intelligence-faces-a-reckoning-1471530464 |url-status=live }}</ref> Theodore Huber and Robert Olan, two partners at hedge fund [[Deerfield Management]], and Christopher Worrall, an employee at the [[Centers for Medicare & Medicaid Services|Centers for Medicare and Medicaid Services (CMS)]], were convicted for insider trading by the [[United States Attorney for the Southern District of New York|U.S. Attorney's Office in the Southern District of New York]].<ref name=":0">{{Cite web |date=2018-05-04 |title=Four Defendants Convicted In Manhattan Federal Court For Stealing Confidential Government Information And Using It To Engage In Illegal Trading |url=https://www.justice.gov/usao-sdny/pr/four-defendants-convicted-manhattan-federal-court-stealing-confidential-government |access-date=2022-07-07 |website=www.justice.gov |language=en |archive-date=2022-07-07 |archive-url=https://web.archive.org/web/20220707150538/https://www.justice.gov/usao-sdny/pr/four-defendants-convicted-manhattan-federal-court-stealing-confidential-government |url-status=live }}</ref>  Worrall leaked confidential government information that he stole from CMS to Blaszczak, and Blaszczak passed that information to Huber and Olan, who made $7&nbsp;million trading securities.<ref name=":0" /><ref>{{Cite news |date=2018-04-02 |title=Washington insider's 'secret sauce' fueled NY hedge fund, U.S. says at trial |language=en |work=Reuters |url=https://www.reuters.com/article/us-usa-crime-healthcare-leaks-idUSKCN1H90QQ |access-date=2022-07-07 |archive-date=2022-07-07 |archive-url=https://web.archive.org/web/20220707150415/https://www.reuters.com/article/us-usa-crime-healthcare-leaks-idUSKCN1H90QQ |url-status=live }}</ref>  The convictions were upheld in 2019 by the Second Circuit, U.S. Court of Appeals in Manhattan; that opinion was vacated by the Supreme Court in 2021, and the Second Circuit is now reconsidering its decision.<ref>{{Cite news |last1=Godoy |first1=Jody |date=2021-06-09 |title=2nd Circuit rethinks hedge fund insider trading convictions |language=en |work=Reuters |url=https://www.reuters.com/legal/litigation/2nd-circuit-rethinks-hedge-fund-insider-trading-convictions-2021-06-09/ |access-date=2022-07-07 |archive-date=2022-07-07 |archive-url=https://web.archive.org/web/20220707150415/https://www.reuters.com/legal/litigation/2nd-circuit-rethinks-hedge-fund-insider-trading-convictions-2021-06-09/ |url-status=live }}</ref>

In 2023, [[Terren Peizer]] was charged with insider trading by the SEC, which alleged that he sold $20&nbsp;million of Ontrak Inc. stock while he was in possession of material nonpublic negative information.<ref name="auto">{{Cite web|url=https://www.sec.gov/news/press-release/2023-42|title=SEC Charges Ontrak Chairman Terren Peizer With Insider Trading|website=SEC.gov|access-date=2023-03-30|archive-date=2023-03-22|archive-url=https://web.archive.org/web/20230322180629/https://www.sec.gov/news/press-release/2023-42|url-status=live}}</ref><ref>{{Cite web|url=https://www.jdsupra.com/legalnews/client-alert-doj-and-sec-used-data-3325885/|title=Client Alert: DOJ and SEC Used Data Analytics to Target Insider Trading with 10b5-1 Plans|website=JD Supra|access-date=2023-03-30|archive-date=2023-03-27|archive-url=https://web.archive.org/web/20230327185109/https://www.jdsupra.com/legalnews/client-alert-doj-and-sec-used-data-3325885/|url-status=live}}</ref> Peizer was the CEO and chairman of Ontrak.<ref>{{Cite web|url=https://www.lexology.com/library/detail.aspx?g=d852e2cb-3338-435f-8475-8a9d1120b2ec|title=DOJ and SEC bring charges for insider trading and fraudulent scheme using purported 10b5-1 plans|first=Cydney S.|last=Posner|date=March 6, 2023|website=Lexology|access-date=March 30, 2023|archive-date=March 27, 2023|archive-url=https://web.archive.org/web/20230327174428/https://www.lexology.com/library/detail.aspx?g=d852e2cb-3338-435f-8475-8a9d1120b2ec|url-status=live}}</ref><ref name="auto6"/> In addition, the [[U.S. Department of Justice]] announced [[criminal charge]]s of [[securities fraud]] against Peizer, charging that thereby he had avoided $12&nbsp;million in losses; he was arrested.<ref name="auto5"/><ref name="auto"/><ref name="auto6">{{Cite web|url=https://www.ft.com/content/0a74de62-2758-4590-9c1f-6d18aef8f6d4|title=One-time Milken associate now at centre of novel insider trading case; US authorities accuse investor of violating rules on stock sales plans for corporate executives|date=March 20, 2023|work=The Financial Times|access-date=March 30, 2023|archive-date=March 27, 2023|archive-url=https://web.archive.org/web/20230327194912/https://www.ft.com/content/0a74de62-2758-4590-9c1f-6d18aef8f6d4|url-status=live}}</ref><ref>{{Cite web|url=https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-delivers-keynote-aba-s-38th-annual-national|title=Assistant Attorney General Kenneth A. Polite, Jr. Delivers Keynote at the ABA's 38th Annual National Institute on White Collar Crime|date=March 3, 2023|website=The United States Department of Justice|access-date=March 30, 2023|archive-date=March 27, 2023|archive-url=https://web.archive.org/web/20230327185107/https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-delivers-keynote-aba-s-38th-annual-national|url-status=live}}</ref>  The case was tried in the [[U.S. District Court for the Central District of California]] before U.S. District Judge [[Dale S. Fischer]].<ref name="auto5">{{Cite web|url=https://www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer|title=UNITED STATES V. TERREN S. PEIZER; PENDING CRIMINAL DIVISION CASES; Court Docket: 2:23-CR-89|date=March 1, 2023|website=The United States Department of Justice|access-date=March 30, 2023|archive-date=March 28, 2023|archive-url=https://web.archive.org/web/20230328022941/https://www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer|url-status=live}}</ref>  He was convicted of all three charges in June 2024, and faces up to 65 years in prison.<ref>Dave Michaels (June 21, 2024). [https://www.wsj.com/finance/regulation/jury-convicts-milken-protege-terren-peizer-of-insider-trading-7c78ba2a "Jury Convicts Milken Protégé Terren Peizer of Insider Trading,"] ''The Wall Street Journal''.</ref><ref>{{Cite web|url=https://ktla.com/news/local-news/santa-monica-man-used-anti-insider-trading-measure-to-commit-fraud-doj/|title=Santa Monica man used anti-insider-trading measure to commit fraud: DOJ|date=March 1, 2023|access-date=March 30, 2023|archive-date=March 28, 2023|archive-url=https://web.archive.org/web/20230328043228/https://ktla.com/news/local-news/santa-monica-man-used-anti-insider-trading-measure-to-commit-fraud-doj/|url-status=live}}</ref>