Illegal insider trading generally occurs when a security is bought or sold in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material, nonpublic information. In recent years, the SEC has filed insider trading cases against hundreds of entities and individuals, including financial professionals, hedge fund managers, corporate insiders, attorneys, and others. In 2014, examples of noteworthy cases include enforcement actions against the following:
Two husbands on March 31, 2014 – In two unrelated cases, the SEC charged two men with insider trading on confidential information they learned from their wives about Silicon Valley-based tech companies. Each agreed to financial sanctions to settle the charges.
Stockbroker and law firm clerk on March 19, 2014 – SEC charged two individuals who were linked through a mutual friend, with insider trading for $5.6 million in illicit profits based on nonpublic information that the clerk obtained by accessing confidential documents in law firm’s computer system.
Wall Street investment banker on February 21, 2014 – SEC charged an investment banker with making nearly $1 million in illicit profits by insider trading in a former girlfriend’s brokerage account to pay child support.
Chicago-based accountant – SEC charged an accountant with insider trading ahead of the release of financial results by the company where he worked. The individual made more than $250k in illicit profits.