Insider trading is one of the most sensationalized, highly-publicized securities violations covered in the media. It involves trading a public company’s stock or other securities in breach of a duty while in possession of material, non-public information about the company. Over the years, several high-profile insider trading cases have captured the public’s attention and served as stark reminders of the significant consequences flowing from engaging in illegal insider trading. David Chase, Esq., a seasoned SEC insider trading defense lawyer and former SEC prosecutor, offers a compelling look into some of the most famous insider trading cases, underscoring the complexities of these legal cases and the critical importance of being protected and defended by experienced and knowledgeable SEC defense counsel.
- Martha Stewart – ImClone Systems
One of the most well-known cases involved Martha Stewart, the home décor mogul, who was convicted in 2004 of insider trading in the biopharmaceutical company, ImClone Systems. This insider trading case revolved around her selling 3,928 shares of ImClone, based on material, non-public information from her broker, who had learned that the FDA would decline to review a new cancer drug from ImClone. Stewart was accused of avoiding a loss of $45,673 based upon her sales prior to the public release of news. Notably, Stewart was ultimately criminally charged by the Department of Justice and served jail time, but not for engaging in illegal insider trading. Rather, she was indicted for lying about the underlying insider trading activity, which led to charges of conspiracy, obstruction of justice, and making false statements to federal investigators. Stewart’s case is particularly noteworthy because it highlights that insider trading charges can impact individuals in any field, and not financial market professionals.
- Raj Rajaratnam – Galleon Group
The founder of the Galleon Group, Raj Rajaratnam, was arrested in 2009 in what was then considered the largest hedge fund insider trading case in the United States. The court found that Rajaratnam and his associates profited or avoided losses of around $70 million by trading based on insider information from various sources. His conviction in 2011 on 14 counts of conspiracy and securities fraud underscored the severity with which the justice system can treat such insider trading violations. Rajaratnam’s case is a primary example of how deep insider trading can run within the financial markets, and how broad and expansive an insider trading network can morph.
- Jeffrey Skilling – Enron
Jeffrey Skilling, the former CEO of Enron, was implicated in one of the biggest corporate securities fraud scandals in history. Skilling’s fraudulent conduct also included elements of illegal insider trading. Before the public was aware of Enron’s true dire financial condition, he sold approximately $60 million in company stock based on his non-public knowledge of the impending bankruptcy. This scandal not only led to significant financial reforms with the Sarbanes-Oxley Act, but also highlighted the devastating impact insider trading can have on innocent shareholders and the investing public.
- Ivan Boesky – Wall Street’s Notorious Arbitrageur
In the mid-1980s, Ivan Boesky, one of Wall Street’s most infamous figures, was charged with insider trading that involved several key players, including the investment banker, Michael Milken. Boesky was accused of making over $200 million by trading on tips he received from corporate insiders. His case led to a widespread investigation into illegal activity on Wall Street, resulting in significant legal reforms and enforcement measures to combat insider trading.
The Critical Role of a SEC Defense Insider Trading Attorney in a SEC Investigation
Each of these cases illustrates not just the significant personal, professional and reputational risks involved in engaging in illegal insider trading, but also the intricate legal challenges that they present both during the investigatory stage as well as in trial. Defending such charges requires an in-depth understanding of the insider trading securities laws, as well as institutional knowledge of how the SEC investigates and prosecutes insider trading. David R. Chase, a former SEC prosecutor who previously investigated insider trading cases for the SEC, has extensive experience and three decades of experience in successfully defending his clients in SEC insider trading investigations around the nation.
With an insider’s perspective on SEC insider trading investigation tactics and deep expertise in insider trading law, Mr. Chase offers an invaluable resource for individuals and corporations navigating the complexities of an insider trading investigation.
Contact an Insider Trading Defense Lawyer
Insider trading scandals have the power to undermine public trust in financial markets and can have severe consequences for those involved. If you or someone you know is facing allegations of insider trading, securing a seasoned insider trading lawyer like David R. Chase is imperative. The law office of David R. Chase, P.A., is committed to offering rigorous defense to individuals being investigated for insider trading and has achieved numerous successful results for its clients. Contact David R. Chase, P.A., today to safeguard your personal and reputational interests if you are under SEC investigation or you have just received a SEC Subpoena. Call David R. Chase, P.A., today at: 800-760-0912 or email: david@davidchaselaw.com.
