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Randall Lee
Wilmer Cutler Pickering Hale and Dorr LLP

Mr. Lee is the founding partner of Wilmer Hale's Los Angeles office, a member of the Securities and Litigation and Controversy Departments, and a member of the Securities Enforcement and Investigations and Criminal Litigation Practice Groups. Previously, he was the Regional Director of what is now known as the Los Angeles Regional Office of the SEC. He specializes in securities enforcement and compliance matters and white collar criminal defense.
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Securities and Insider Trading: Outlook for 2010

by Randall Lee, Dec 31, 2009

Insider trading continues to be a significant priority for the SEC. The charges filed in two recent complex insider trading rings, including the highly publicized case against Galleon Management LP, include allegations that confidential earnings and other information from a number of well-known public companies was misused. Even the most sophisticated of companies can be vulnerable to the misuse of their nonpublic information. These cases serve as a important reminder to public companies of the importance of having — and enforcing — a robust insider trading compliance program and of taking prompt action to investigate any potential violations of that program.

Next, the SEC has placed a renewed emphasis on cooperation and coordination with other authorities — especially with criminal prosecutors. Many of the SEC’s recent high profile cases, including several significant insider trading cases, were brought in coordination with federal criminal prosecutors. It is commonplace for SEC and Department of Justice investigators to share information, resources, and expertise. The looming threat of criminal prosecution raises the stakes for issuers and other market participants to pay close attention to the risks of insider trading.

And, finally, overseas corruption involving US companies, principally covered by the Foreign Corrupt Practices Act (FCPA), will continue to be a priority for both the SEC and the US Department of Justice. In addition to relying on the FCPA, prosecutors have recently brought charges alleging overseas commercial bribery involving private companies (not just foreign government officials) under the Travel Act. For its part, the SEC recently announced the formation of a specialized investigative group focused on FCPA cases. These developments illustrate the continuing importance of compliance programs focused on illegal overseas business practices, including questionable transactions that do not involve government officials.

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