Illegal Insider Trading: A Working Knowledge of Recent Developments

Although arguments exist on both sides regarding whether illegal insider trading should be deemed illegal or not, today it is globally recognized as a tool to perpetrate a fraud and is a direct threat to investors and therefore the capital raising process used by publicly traded companies. To ensure you, your employees and your financial institution are not fined, jailed or forced to close, it is imperative that you understand what to look for when identifying possible money laundering on accounts within your institution.

Why Should You Attend:

The term insider trading commonly refers to illegal conduct. However, the term encompasses legal and illegal conduct. Trading by insiders such as officers, directors and employees buying and selling the stock of their employer companies is legal when effected pursuant to promulgated rules and restrictions. Illegal insider trading generally refers to buying or selling a security while in possession of material nonpublic information and in breach of a fiduciary duty or other relationship of trust and confidence. In the U.S., illegal insider trading is a crime punishable by disgorgement of profits, imposition of fines and imprisonment. Additionally, the SEC can bring civil proceedings and Self-Regulatory Organizations (SROs) similarly can take regulatory action to address this conduct.

Unlike most other countries, the U.S. does not have a statute prohibiting illegal insider trading. Recent court of appeals decisions have reversed guilty verdicts placing into question what constitutes illegal insider trading by narrowing what is needed to support a finding of illegal insider trading. This webinar will describe the environment and progression of this conduct in order to provide an understanding of the regulators efforts in detecting, investigating and prosecuting illegal insider trading.

Areas Covered in the Webinar:

• What is insider trading? Legal and illegal insider trading (SEC Rule 10b5 and 10b5-1 and 10b5-2).
• What is front running?
• History of insider trading and the insider trading securities and enforcement.
• The U.S. regulatory framework including the Justice Department, the SEC, SROs (FINRA and other markets) and other global jurisdictions.
• Detecting insider trading.
• Investigating insider trading - the sensitive SRO/federal interface.
• Prosecuting insider trading.
• Case studies - past and recent.
• What happens when a SRO/FINRA detects potential illegal insider trading?
• When can I plead the 5th Amendment to the U.S. Constitution preserving my right not to incriminate myself?
• The role of the new SEC Rule 613 - the Consolidated Audit Trail (CAT).

Who Will Benefit:

• Hedge fund managers
• Broker/dealer branch managers
• Compliance managers
• Research analysts
• Registered representatives
• SRO market surveillance (regulatory) analysts/investigators
• Training department