Insider Trading

Employee Pleads Guilty to Insider Trading

The Washington Post reports that former Marvell Technology Group employee Stanley Ng has pleaded guilty to one charge of insider trading, and has admitted to providing company information to a hedge fund. Mr Ng reportedly faces a prison term of between six months and one year. The case reportedly follows a probe into corruption in the expert networking industry, and a wider investigation into the hedge fund industry which has been described as “the biggest insider trading case in history”.
The Washington Post: California man enters guilty plea in NY insider trading probe of expert networking firms (8 December 2011)
(Source: The Washington Post)

New Insider Trading Charges Expected in Hedge Fund Probe

According to sources familiar with the investigation, the federal government is poised to bring new charges in its widespread investigation into insider trading practices. The charges in this instance will reportedly be brought against individuals from two hedge funds, Diamondback Capital Management (Diamondback) and Level Global Investors (Level Global). Both hedge funds were raided by the government late last year. The government’s investigation into Diamondback and Level Global stemmed from its inquiry into Primary Global Research (Primary). Numerous individuals associated with Primary have been convicted or pled guilty to leaking confidential information to hedge fund traders.
New York Times: New Round of Insider Trading Charges Is Expected (30 November 2011)
(Source: New York Times)

Consultant Faces Court Over Insider Trading, Money Laundering
Europe, Middle East and Africa

Bloomberg reports that management consultant Rupinder Sidhu is currently being tried for 23 charges of insider trading and one count of money laundering. Prosecutors reportedly allege that Mr Sidhu used tips from an employee of AKO Capital hedge fund to profit by betting on shares in companies including Julius Baer Group and Swatch Group. Prosecution lawyer Michael Brompton said that Mr Sidhu traded securities knowing that AKO Capital planned transactions in the same shares, and that “[t]his information enabled the defendant to engage in successful spread betting on stocks and shares”. Mr Sidhu has reportedly pleaded not guilty to all charges.
Bloomberg: Consultant Facing Insider-Trading Charges Goes on Trial (28 November 2011)
(Source: Bloomberg)

SEC Imposes US$92.8M Penalty On Hedge Fund Crook

Earlier this week, a judge ordered Raj Rajaratnam to pay a $92.8 million penalty related to his insider trading conviction last month. The penalty is the largest ever given to a person in an SEC insider trading case. Along with its sheer size, the penalty is also noteworthy in that judges do not typically impose large civil penalties on defendants who have already been convicted and fined in criminal court. According to the SEC’s head of enforcement, “The penalty imposed today reflects the historic proportions of Raj Rajaratnam’s illegal conduct and its impact on the integrity of our markets”.
New York Times: Rajaratnam Ordered to Pay $92.8 Million Penalty (8 November 2011)
(Source: New York Times)

CSRC Announces New Insider Trading Measures
Asia Pacific

Reuters reports that the China Securities Regulatory Commission (CSRC) will require listed companies to keep records that identify individuals within their organisation who may have access to inside information. The CSRC reportedly stated that “[m]anaging inside information from the source is … vitally important”. The new requirements will also reportedly require companies to keep progress logs of “activities that could impact [their] share price, such as major restructuring, mergers and acquisitions, spin-offs and share buy-backs”. The new rules will reportedly commence on 25 November 2011.
Reuters: China to set up database to combat insider trading (27 October 2011)
(Source: Reuters)