Insider Trading Enforcement


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.