Illegal insider trading defined by statutes, regulations and common law means exploiting one’s role in an organisation to gain information to profitably trade in financial markets.
Public policy debates related to insider trading usually weigh the harm to financial markets through reduced liquidity. And undesirable effects on managerial incentives that pose moral hazard against the economic benefit from any information that’s indirectly revealed via the trading process. As many recent high profile cases highlight, illegal insider trading is actively prosecuted.
South Africa’s (SA’s) recent case of Insider Trading was Coal of Africa Chief Operations Officer, Michiel Jakobus Bronn. He was fined for insider trading that took place even after he was instructed by the company’s chief executive officer not to trade shares, according to a South African regulator. Market abuse is curbed by the Financial Services Board’s (FSB) when it comes to insider trading laws in SA.
While in the United States Hedge fund billionaire Leon Cooperman’s battle with the Securities and Exchange Commission (SEC) shows no signs of going away. The SEC earlier this year accused Cooperman of trying to create a “loophole that rewards deception” in his bid to throw out the insider trading case against him. And the long-shot logic behind his defence suggests just how strong the SEC’s case against him might be.
Cooperman, the CEO of Omega Advisors, is accused of making dozens of trades in Atlas Pipeline Partners securities in 2010. Netting profits of $4 million, after learning from a company insider that the troubled oil and gas company was on the verge of a merger deal. To make matters worse, the SEC accuses Cooperman of trying to cover up his conversations and, according to its initial complaint filed in September, has three witnesses to bolster its case.
The 73-year-old onetime Goldman Sachs (gs, -0.38%) exec is the most prominent financier to be charged with insider trading in decades, as “Fortune online” reported.
And in the United Kingdom five men were involved in the largest U.K. Insider-Trading Case. After a four-month trial, only two of five defendants in Britain’s most profitable insider-trading case were found guilty, as “Bloomberg” reported.
The two financial professionals were accused of making 7.4 million pounds with three others on confidential information about six stocks. They’ve been found guilty by a London court, with the other men acquitted.
You can find out more about them here: http://www.independent.co.uk/news/business/news/martyn-dodgson-insider-trading-deutsche-bank-lehman-brothers-a7022041.html.