Regulatory Compliance Association Reviews

A New Paradigm for Insider Trading Prosecution

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Federal enforcement of insider trading remains a high priority area for the Securities and Exchange Commission and other federal enforcement officials. The rules haven’t changed, but the tools for enforcement have. Recent cases have brought to bear an increasing use of aggressive tactics by government officials, including the use of wiretapping and witness flipping, and use of other technologically advanced surveillance and analytical tools. Perhaps more importantly, far greater scrutiny is being paid on the source of one’s “edge”, the identification and trading around “catalysts”, aberrant trading activities and outside business relationships with experts, corporate executives and other industry participants who may be in the know, all of which are likely to fundamentally reshape the way in which investment research, investing and trading are conducted. At the same time, instant messaging and other social media tools and applications make real-time surveillance by compliance officers far more complicated.

Beyond the legal risks, enforcement has been shown to threaten the viability of even the largest, venerable investment managers. Given such risks, and ongoing efforts to extinguish what one prominent law enforcement official referred to as a “culture of corruption” on Wall Street, insider trading enforcement is likely to remain a priority into the foreseeable future. The role of legal and compliance to surveil investment and trading and other communications has become even greater. Is your compliance program up to the task?

Following this session, participants should be able to:

  • Understand the basics laws of insider trading;
  • Identify high risk activities that require closer evaluation;
  • Appreciate the tools and tactics utilized by government officials;
  • Understand potential remedies that may be asserted by regulators;
  • Prepare themselves for interacting with regulators when they come calling;
  • Evaluate and refine their compliance program in light of recent actions; and
  • Understand the elements of a failure to supervise claim.

Session Chairman:
Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
Chairman, Regulatory Compliance Association

Senior Fellow From Practice:
Rory Cohen, JD, Partner, Mayer Brown

Guest Lecturers:
Stephanie Monaco, JD, Partner, Mayer Brown
Richard Rosenfeld, JD, Partner, Mayer Brown
Brian Guzman,  JD, Partner & General Counsel, Indus Capital Partners
Scott Pomfret, JD, Regulatory Counsel, Highfields Capital
Meyer Eisenberg, LLB, Adjunct Senior Research Scholar and Lecturer in Law, Columbia Law School

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