Wall Street’s Insider Trading Tricks Spread Across U.S. – Bloomberg 12-21-12

Salient to Investors:

The number of people sued by the SEC or charged with insider trading by the Justice Department has more than doubled since 2008 – 22 percent involving health-care stocks.

Bankers, lawyers, accountants, doctors, traders, analysts, hedge-fund managers, company chiefs, pharmaceutical executives and movie producers, lovers, neighbors, classmates and fraternity brothers and families were perpetrators.

Organized rings of financial professionals lack the comfort of trusting leaks to relatives or old friends, so often cover their tracks through disposable mobile phones, coded e-mails, middlemen and other deceptions.

New detection approaches examine traders and the timing and volume of their buying and selling, looking for similar trading activity by investors, without being certain if they know each other.

Asking people why they made certain trades doesn’t work with rings, so those being arrested may be learning about the investigation for the first time.

Read the full article at http://www.bloomberg.com/news/2012-12-21/wall-street-s-insider-trading-tricks-spread-across-u-s-.html.

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Overseas Insider Traders Face Little Risk of U.S. Prison – Bloomberg 12-19-12

Salient to Investors:

The SEC is increasing its focus on insider trading by overseas buyers of US-traded securities.

Overseas trading probes present significant obstacles to criminal charges. Foreign insider traders, while at some risk of losing their money, face very little chance of going to prison.

The significant number of cross-border transactions that include non-U.S. advisers multiplies the potential for leaks around the world.

Traders can more easily buy and sell securities through online brokers while masking their identity through offshore firms.

Defense attorneys for overseas traders, aware that the SEC’s evidence may be lacking, are increasingly seeking to fight cases rather than settle.

Jerry Markham at Florida International University said overseas regulators usually aren’t as vigilant in fighting insider trading at home – insider trading is really an American concept.

Read the full article at http://www.bloomberg.com/news/2012-12-20/overseas-insider-traders-face-little-risk-of-u-s-prison.html.

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