Category: References


Litecoin founder Charlie Lee has come forward to deny recent allegations, accusing the former Google engineer of engaging in LTC insider trading on Coinbase during the time he served as a director of engineering at the popular exchange desk.

In a Medium post from yesterday, independent cryptocurrency sleuth Bitfinex’ed – better known for their extensive criticism of exchange desk Bitfinex and its shady ties to cryptocurrency firm Tether – speculated the reason behind Lee’s recent decision to dump all of his Litecoin wasn’t to avoid “conflict of interest.” Instead, it was to benefit from the currency’s sudden surge in price.

Bitfinex’ed goes on to suggests that Lee was involved in an elaborate scheme to get Litecoin listed on Coinbase and its close associate, exchange desk GDAX – a move that would see the ex-Googler cash out his LTC holdings following a 9,150-percent increase in value.

The independent investigator further insists that – prior to integrating Litecoin trading on Coinbase on May 3 last year – Lee had already been exploiting his position at the company to advance his own undertaking.

For background, Lee eventually left the popular exchange desk to focus on Litecoin a month after LTC appeared on Coinbase.

The Bitfinex’ed post has since prompted Lee to respond to the accusations, defending his decision to keep his engineering role at Coinbase while working on Litecoin.

“I saw this FUD article recently, and I figure I should refute it before it gets spread as truth,” the former Googler wrote in a Reddit post. “I’ve already seen many people say that it proves something.”

“I joined Coinbase in 2013 as the [second] engineer and helped build Coinbase to become what it is today,” Lee continued. “I didn’t just join them last year, get them to add Litecoin, and quit! I took [three] years before I felt like it made sense business-wise to add Litecoin to Coinbase.”

Responding to claims of collusion with Coinbase CEO and founder Brian Armstrong, Lee said that he pitched the idea to integrate Litecoin at the same time he broached adding Ethereum. The latter ultimately made it to the exchange platform first.

“When it made sense, LTC was added to GDAX because LTC was the top-[three] trading volume of any coins at that time,” Lee added. “And when GDAX started doing huge volume for LTC, I asked Brian if it made sense for Coinbase to add LTC in that tweet.”

“He said yes, and that was when the decision was made.”

The Litecoin founder further clarified that his departure from Coinbase was announced ahead of time. “The whole company knew already months before the decision was made to add Litecoin,” he said.

Curiously, Coinbase has recently been embroiled in a series of insider trading scandals.

Shortly after Bitcoin Cash made its debut on the exchange desk, its price saw an exorbitant surge on Coinbase; many cryptocurrency enthusiasts speculated the reason for the sudden increase in value could’ve been due to insider trading.

Indeed, Armstrong later confirmed the company is running an internal investigation to determine whether there was any foul play. The company has since chalked up the price increase to “extreme buyer demand.”

More recently, Coinbase had to dispel news that cryptocurrency Ripple (XRP) might soon make its way on the platform, following rumors that employees were chatting about integrating XRP at the company’s Christmas party.

“As of the date of this statement, we have made no decision to add additional assets to either GDAX or Coinbase,” the post read. “Any statement to the contrary is untrue and not authorized by the company.”

While cryptocurrency companies are technically not yet regulated for insider trading, authorities across the globe are gradually moving towards introducing new legislation.

This could spell a whole lot of trouble for Coinbase – or any other cryptocurrency company possibly engaging in illegitimate activities.

Source:
https://thenextweb.com/hardfork/2018/01/11/litecoin-charlie-lee-coinbase-trading/

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WHITE-COLLAR crime is still a “major problem” with only 12 insider traders convicted in the past five years despite strong indications of foul play.

Buying or selling shares after receiving confidential tips can carry a seven-year jail term

An investigation by The Times reveals that a large number of investors could potentially be saving millions of pounds by benefiting from insider tips about FTSE-listed companies.

Analysis by the newspaper showed that the share price of the company issuing a profit warning fell in 67 per cent of the cases on the day before the warning.

This suggests that a number of investors were offloading shares ahead of the bad news – potentially saving tens of millions of pounds.

Likewise, on the day before a takeover announcement the share price increased in 70 per cent of cases – again suggesting investors were being tipped off and buying ahead of the good news.

Buying or selling shares after receiving confidential and market sensitive information can carry a seven-year jail term, but there have been only very few convictions despite the number of investigations doubling since 2013.

A Freedom of Information request by The Times showed the Financial Conduct Authority (FCA) had prosecuted eight cases of insider trading in the past five years and secured 12 convictions.

In contrast, the Department for Work and Pensions prosecuted or penalised more than 10,000 benefit fraudsters last year.

But the City only employed 63 full-time staff to work on insider trading investigations – compared to the 4,000 strong staff investigating benefit fraud for the Department of Work and Pensions.

Experts believe the opportunistic crime can be facilitated by encrypted message services or “burner” mobile phones.

There are also thought to be organised rings who systematically leak information to websites and newspapers – meaning criminals can cite the article as the reason for their trading activity if they get caught out.

Mark Dampier, research director at the investment broker Hargreaves Lansdown, said: “Given the scale of regulation nowadays these figures are really surprising and suggest insider dealing is still a major problem.

“Thirty years ago it was almost seen as a perk of the job but times have changed as understanding has grown about how it damages confidence in the markets.
“Getting the evidence to launch a prosecution is not easy but you have to wonder whether the regulator has been distracted since the financial crisis.”

Source:

https://www.thesun.co.uk/news/5375794/white-collar-crime-fca-convictions-jail/

Morgan Stanley (NYSE:MS) has seen its stock price gain 2.88, or +5.49%, so far in 2017. In the past 3-month period alone, shares of MS have appreciated +6.23 – or +12.68%. The stock’s 52-week range is $40.06 to $55.98, and its 3-month range is $47.42 to $55.98.

The average Wall Street analyst rating for Morgan Stanley is Hold, according to the average of 14 analyst scores. Of those analysts, 6 rate stock as a Strong Buy, 6 rate it as Hold, and just no analyst rates it as a Moderate Sell.

Insider Trading Activity for Morgan Stanley

Taking a look at insider trading at Morgan Stanley (NYSE:MS) can give useful insight into how the stock is performing. Morgan Stanley has had 9 insider trades in the last 3 months, including 5 open market buys and 4 sells. Of those insider trades, 5,667 shares of Morgan Stanley were purchased and 78,850 shares were sold. The total number of shares traded in the last 90-day period is 84,517.

Insider trading over the last 12 months, however, paints a different picture. In the last year there have been a total of 63 insider trades, including 28 open market buys and 35 sells. Of those transactions, there were 891,158 shares of MS bought and 1.54 million shares sold. The total number of shares traded in the last 12 months is 2.44 million.

The most recent open market insider trade was Sell of 25,000 shares on a day where the closing price was 50. The insider, HOTSUKI KEISHI, now holds 207,270 shares of MS.

The most recent non open market insider trade was completed by BOWLES ERSKINE B on 11/22/2017, and was a acquisition of 1,303 shares with a final price of $49.25. The insider now holds 160,335 shares of Morgan Stanley (MS).

Examining Institutional Ownership at Morgan Stanley (NYSE:MS)

According to Morgan Stanley’s latest 13F filing with the US Securities and Exchange Commission (SEC), institutional ownership is at 86.61%. The total amount of shares outstanding is 1.81 billion, giving the company a market capitalization of about 100.10 billion.

There are 991 institutional holders with active positions, accounting for 1.57 billion shares in total. Of those holders, 408 had increased positions amounting to 46.97 million shares, 415 had decreased positions amounting to 56.18 million shares, and 168 holders have a held position accounting for 1.46 billion shares.

The top 5 institutional holders, in ascending order, are as follows: MITSUBISHI UFJ FINANCIAL GROUP INC with 432.02 million shares, STATE STREET CORP with 150.95 million shares, PRICE T ROWE ASSOCIATES INC /MD/ with 122.96 million shares, BLACKROCK INC. with 106.04 million shares, and VANGUARD GROUP INC with 94 million shares.

According to Morgan Stanley (MS) most recent 13F filing, the company has 82 new institutional holders – accounting for 8.2 million shares of its common stock. There were 67 sold out positions, amounting to 2.82 million shares.

Source:

https://economicsandmoney.com/2018/01/18/a-glimpse-into-insider-trading-and-ownership-at-morgan-stanley-ms-4/

The decision to implement a blanket ban on trading by South Korea was one of the primary reasons that triggered a sell-off. In this regard, yesterday, South Korean Financial Supervisory Service (FSS)authorities announced that they are investing a case of insider trading by some of their employees. Choi Heung-sik, the head of FSS has confirmed that some of their officials have sold their crypto holdings before the announcement of a blanket ban was made. FSS has guaranteed to make all findings, related to insider trading, publicly available.

The preliminary details provided by the investigating agency indicate that before the proposed blanket ban was announced, the crypto asset holdings were sold by an FSS employee hired by the Policy Coordination Office. The employee was assisting the organization in the establishment of measures to curb speculation in cryptocurrencies.

It is believed that the official had reportedly purchased cryptocurrencies worth 13 million Won ($12,220) on July 3, 2017. However, after becoming aware of the proposed ban on cryptocurrency trading, on December 11, 2017, the official diluted his holdings for 20 million Won. That left him with a profit of 7 million Won.

Hong Nam-ki, the Director of the Office of Coordination, said (Korean translated to English)

“The relationship between the inside and the outside of the company [is being] investigated by one or two civil servants as I know, and I would like to ask government officials to refrain from investing…There is a bar. ”

A senior official of FSS had pointed out that according to the Korean Public Service Ethics Act, to prevent the misuse of internal information, public officials are not allowed to trade in stocks. However, cryptocurrencies are not recognized as a currency or financial asset and there is no relevant code that governs them as of now. Still, the official may get punished for the misuse of internal information.

Despite the proposed ban, South Korea has already taken several measures to streamline cryptocurrency trading. Investors are no longer allowed to use trading accounts with virtual names. Investors who refused to use real names in their accounts were fined.

In this regard, the Bank of Korea Governor Lee Ju-yeol said

“it’s understandable that the government is pushing ahead with its plans to further regulate the crypto currency market, as the prices of crypto currencies are showing sudden ups and downs. The trend is not good from the perspective of investors”.

Investors and speculators who are against the cryptocurrency ban have launched a petition with the government. The petition has been signed by 210,000 people as of date. According to the Wall Street Journal, the petition reads “Please don’t take away our happiness and dreams that we could have for the first time living in South Korea.”

Prime Minister Lee Nak-yon has sought to calm down the situation by saying that a new legislation has to be passed in order to ban cryptocurrency trading. That means the national assembly has to convene and discuss the matter before a final decision is taken.

Source:
https://www.legalgamblingandthelaw.com/news/south-korea-begins-investigation-insider-trading-crypto-currencies/

Melker Schörling, Hexagon’s Chairman of the Board, said, “I have received the statement from Christian B. Hjort and Erik Keiserud, Ola Rollén’s lawyers, and I have complete confidence in Ola Rollén. During 16 years of close collaboration, I have never had to question his judgement.”

Below is the press release issued by Christian B. Hjort and Erik Keiserud, Ola Rollén’s lawyers:

Oslo, 31 October 2016

As Ola Rollén’s Norwegian lawyers we would like to inform the following:

The Norwegian economic crime authority has accused Ola Rollén for insider trading in connection to an investment in the Norwegian company Next Biometrics ASA in October last year.

Ola Rollén was following the charge, detained on 29 October 2016 for a week following a decision by the district court in Oslo. The decision to detain Ola Rollén is based on the economic crime authority’s need to secure evidence.

Ola Rollén firmly denies the accusations. He does not admit to any guilt.

We argue that the charge is based on a misinterpretation of the factual and legal issues in the matter.

The acquisition of 284,341 shares in Next Biometrics was done by the private equity fund Greenbridge Partners, which at the time was being founded in order to complete a long-term investment in Next. The shares were acquired according to normal procedures in the market place, and were not based on any insider information.

Ola Rollén hopes that the investigation will confirm the actual circumstances as soon as possible. He has been fully cooperative with authorities to ensure that the case has all relevant information. He wishes to provide no further comments before the economic crime authority has completed their investigation.

He deeply regrets the harm that this incident and investigation will cause for Hexagon, Greenbridge Partners and himself.

For further information, please contact attorney Erik Keiserud, mobile +47 95170947, e-mail ek@hjort.no, or lawyer Christian B. Hjort, mobile +47 91633626, e-mail cbh@hjort.no

This information is information that Hexagon AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:15 CET on October 31, 2016.

Hexagon is a leading global provider of information technologies that drive productivity and quality across geospatial and industrial enterprise applications. Hexagon’s solutions integrate sensors, software, domain knowledge and customer workflows into intelligent information ecosystems that deliver actionable information. They are used in a broad range of vital industries. Hexagon (Nasdaq Stockholm: HEXA B) has more than 16,000 employees in 46 countries and net sales of approximately 3.0bn EUR. Learn more at hexagon.com (http://www.hexagon.com/) and follow us @HexagonAB.

Source:

https://www.businesswire.com/news/home/20161031005456/en/Ola-Roll%C3%A9n-Investigation-Norwegian-Authorities-Insider-Trading

The Justice Department and the FBI, which it supervises, are both under fire for a bombshell revelation.

In August, Peter Strzok – the FBI’s second-ranking counterintelligence agent – was ousted from the Justice Department’s special counsel probe into Russia, after exchanging anti-Trump messages with his mistress.

Strzok was the FBI agent who officially signed off on the bureau’s decision to launch its Russia investigation during the 2016 election. But he’s now been fired from his job with Special Counsel Robert Mueller.

Adding to Strzok’s “Where’s Waldo” role in the 2016 election is the fact that he was reportedly the official responsible for changing the FBI’s initial conclusion that Hillary Clinton’s use of a private email server was “grossly negligent” – instead, finding that it was “extremely careless.”

Legal analysts say that watered-down language played a role in the decision that the Justice Department wouldn’t prosecute Clinton over her email use.

The Strzok case isn’t the only controversy swirling around the Justice Department today.

Another involves the actions of its U.S. attorneys – the locally-based prosecutors who handle federal cases. Last March, President Trump replaced all U.S. attorneys appointed by President Obama.

The most prominent of the dismissed federal prosecutors was Preet Bharara, the former chief counsel to Sen. Chuck Schumer, D-N.Y.

Bharara served for eight years as the U.S. attorney for the Southern District of New York. That high-profile office gave him a platform to launch crusades against insider trading and political corruption.

Since leaving office, Bharara has become a senior legal analyst for CNN, host of his own legal podcast and an anti-Trump King of Twitter with 96,000 followers.

Bharara’s days as U.S. attorney were heady and filled with media accolades. The Washington Post described him as the new “Sheriff of Wall Street.” The New York Times noted that “Bharara is a charismatic figure who is comfortable in front of cameras, can talk tough, and has a knack for the witty sound bite.”

The only problem is that  like an Icarus who flew too close to the sun, Bharara’s record has been melting recently. The New Yorker magazine wrote in August that “incursions on Bharara’s record have piled up, casting his legacy into doubt … several of his high-profile cases have unraveled.”

Bharara’s successful prosecutions of former New York Assembly Speaker Sheldon Silver and state Senate Majority Leader Dean Skelos have both been overturned following a Supreme Court ruling that narrowed the list of government actions that count as illegal favors.

New York Gov. Andrew Cuomo suggested his fellow Democrat had overreached when he went after Skelos and Silver.

“If you’re using the legal system to quote unquote reform government, you have to do it legally,” Cuomo warned.

Nor have some Bharara’s Wall Street cases fared well. After a judge ruled that the FBI had violated the rights of financier Benjamin Wey by searching his home and office, Bharara’s former office was forced to drop all charges in August. The month before, the case Bharara’s office had built against two traders accused of wrongdoing involving JPMorgan fell apart.

The media are also taking a second look at Bharara’s record.

The Wall Street Journal editorial page noted in September that Bharara’s pursuit of two hedge fund managers for allegedly trading on information won a unanimous rebuke from a three-judge panel of the Second U.S. Circuit Court of Appeals. The Journal noted that the case “repudiated the government’s argument that a gift of confidential information to anyone is enough to prove insider trading.”

The Second Circuit slap-down  may figure prominently in another appeal of a controversial Bharara insider trading prosecution. Last April, renowned sports bettor and Las Vegas businessman Bill Walters was convicted of charges that he received illegal stock tips from Thomas Davis, the former chairman of Dean Foods, which is the nation’s largest milk processor.

Davis helped the government convict Walters as the lone witness against him. As a cooperating witness, his  sentencing has been delayed. Prosecutors said Walters began trading in 2006 on secrets that Davis told him and amassed millions of dollars in illegal profits. In July, a judge sentenced Walters to five years in prison and a $10 million fine.

But there is likely an “original sin” that taints the government’s entire case against Walters. The initial investigation of Davis and Walters, which also tangentially involved famed golfer Phil Mickelson and investor Carl Icahn, had stalled in 2014 after federal wiretaps of Davis and Walters turned up nothing incriminating.

But then both the New York Times and the Wall Street Journal reported in May 2014 that the FBI was conducting an investigation. They published bits of  secret grand jury testimony with details of the probe.

Lawyers for Walters claimed at the time that FBI agents leaked secrets about the probe to prod targets to incriminate themselves. Both Bharara’s office and the FBI strongly denied any such breach of grand jury secrecy at the time.

But late last year, federal District Judge Kevin Castel ordered an inquiry into the leaks. After finally launching a probe, the government admitted that David Chaves, the chief FBI agent in charge of Wall Street investigations, had met New York Times reporters for dinner as far back as April 2013 to talk about the Walters case.

Chaves complained the probe was, “dormant.” Several months later, Chaves told a Wall Street Journal reporter about the probe, leading to what became a form of “insider information trading” between reporters and the FBI.

Last year, Chaves admitted that he had been the main source for both the New York Times and Wall Street Journal stories of May 2014. He claimed that he and five senior FBI agents had met with reporters that month to barter information on the case in exchange for a delay in publishing the story.

Chaves also admits that in exchange he would “from time to time” receive updates from one reporter on what she had learned about the Walters case. He also claimed that Bharara’s U.S. Attorney’s Office knew of the meeting between reporters and the senior FBI agents.

His confession has led to Chaves’  suspension from work and a full-fledged investigation of the leaks by the Justice Department and its Office of Inspector General. Bharara’s office has failed to provide a full explanation of why for two years it denied any leaks of secret grand jury material to reporters. In court filings, it merely stated the delay was due to unspecified “errors” that it does “not take pride in or excuse.”

Lawyers for Walters say they have found evidence of a pattern of illegal leaks out of Bharara’s office in several other of his most famous insider trading cases. In the case of their client, they claim the leaks  amount to an obstruction of justice “as part of a deliberate plan to bolster  an investigation” that was stalled and going nowhere.

The leaks were designed to prod targets to incriminate themselves after the wiretap on Walters’ phone failed to turn up evidence.

Those arguments weren’t enough to convince federal Judge Castel to stop Walter’s trial on insider trading charges, but the government’s glaring misconduct made Walters’ conviction ripe for being overturned on appeal.

And since Walters’ conviction in May, Judge Castel has grown impatient with the snail’s pace of the Justice Department’s probe of Chaves and the leaks from Bharara’s office. This summer, Castel demanded that Justice provide confidential quarterly updates on its probe.

To date, the judge said that Justice Department’s updates to him had provided “virtually no substance.” Given that Chaves is facing possible criminal prosecution and a contempt-of-court finding by the judge, that’s hardly reassuring to Walters or his lawyers.

All of this – the growing reversals of Bharara’s convictions, the outrageous leaks in the Walters case and the molasses-like pace of FBI agent Chaves’ misdeeds – and whether they involved others – are all part of a larger context that should concern the Trump administration, Congress and the general public.

Source
http://www.foxnews.com/opinion/2017/12/06/how-insider-trading-scandal-became-insider-leak-scandal-somethings-rotten-in-justice-department.html

 

An insider is one who because of his status has access to price sensitive information which is not in public domain. James Surowiecki quoted, “If companies tell us more, Insider Trading will be worthless“. Quite precisely, as per Regulation 2 (ha) of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) Unpublished Price Sensitive Information (“UPSI”) is not generally known to the public. But if known, may likely affect the price of the securities in the capital market.

The issue occurred in February 2007 when alerts were generated at the share market regarding dealing in shares of Indian Petrochemical Corporation Limited (“IPCL”) wherein it was observed that some entities purchased large quantities of IPCL shares before it announced its intention to declare interim dividend and considered to amalgamate with Reliance Industries Limited (“RIL”). In March 2016, SEBI by disposing of the charges of Insider Trading against Reliance Petroinvestments Ltd. (“RPIL”) added further lucidity to the understanding of who an insider may be.

Major Findings

  • RPIL was not an insider as there was no evidence to establish the access of UPSI.
  • RPIL is not a person “deemed to be connected”.
  • RIL did not exercise any voting power in RPIL directly.

Factual Matrix:

  • RPIL, which also held 46% stake in IPCL, took a commercial decision authorizing its Directors to invest INR 30 crores in the equity of IPCL. Further, it made additional investments of up to INR 100 Crore in the equity of IPCL.
  • On March 2, 2007, IPCL made an announcement to the stock exchanges for a declaration of Interim Dividend. It is pertinent to note that the order to purchase 98,280 shares of IPCL were placed before an announcement for a declaration of Interim Dividend was made.
  • On March 4, 2007, the proposal for merger of RIL and IPCL was discussed and on the next day, the steps for initiating the proposed merger were taken.
  • On March 10, 2007, a joint meeting of the boards of RIL and IPCL took place where a joint report was submitted setting out the recommended swap ratio was deliberated on. Subsequently, the Boards of RIL and IPCL approved the merger at their respective Board Meetings.
  • In view thereof, SEBI ordered an investigation in June 2007 regarding buying, dealing or selling in shares of IPCL in order to determine if any provisions of the SEBI Act or Rules and Regulations thereunder were violated.

RPIL’s Plea

  • RPIL submitted that the acquisition of shares in IPCL was a part of creeping acquisition of IPCL which was already underway. For better understanding of the subject matter, creeping acquisition is when any person holds 15% or more but less than 55% of shares or voting rights of a target company (IPCL in the present case), such person can acquire additional shares as would entitle him to exercise more than 5% of the voting rights in any financial year ending March 31 after making a public announcement to acquire at least additional 20% shares of target company from the shareholders.
  • RPIL further added that their investment of INR 30 Crore was a commercial decision as they had made a decision to commence creeping acquisition of IPCL shares. As the investment limit agreed to, was almost exhausted in June 2006. Thereafter, the share prices of IPCL had started to increase and eventually touched INR 325 per share, as a result of which shares were not purchased further.
  • Moreover, RPIL stated that the relevant trade did not take place abruptly, the shares in question were purchased on the basis of the share price of IPCL and in line with the commercial decision of RPIL.
  • RPIL pleaded that the past trading pattern of RPIL in the shares of IPCL should have been taken into consideration by the SEBI to ascertain whether the relevant trades were conducted on the basis of UPSI, as there was no proof incumbent upon it in order to sustain a charge of insider trading.

SEBI’s Observation

The two announcements made by IPCL were not Price Sensitive Information

According to the investigation report (“IR”), RPIL had made two announcements:

  • The order to purchase 98,280 shares of IPCL.
  • An announcement to the stock exchanges for a declaration of Interim Dividend.

The share price of IPCL more or less moved in sync with the movement in Sensex. Wherein, the scrips witnessed a substantial price rise subsequent to the announcement of amalgamation of IPCL with RIL.

RPIL is not an insider as defined in Regulation 2(e) of PIT Regulations

Regulation 2(e) of PIT Regulations stipulate that an insider is one who is or was connected with the company or is deemed to have been connected with the company and is reasonably expected to have access to UPSI in respect of securities of a company, or has had access to such UPSI.

RPIL is not a person ‘deemed to be connected’ within the meaning of Regulation 2(h) of the PIT Regulations

The Adjudicating Officer noted that it is imperative to establish that the same individual or body corporate holds more than a third of the voting rights with respect to both the Companies being examined for the purposes of this clause.

It was found that RIL did not exercise any voting power in RPIL directly, as is evident from the shareholding pattern of RPIL during the financial year 2006-07 and RIL as a single entity did not directly hold the requisite one-third shares in RPIL, as the shareholding of RPIL was cross-held by a number of subsidiaries. Moreover, one-third of the voting right in RPIL were exercised by Reliance Ventures Ltd. and not by RIL.

On the basis of the foregoing findings, the Adjudicating Officer disposed of the Adjudication Proceedings initiated against RPIL.

Key Takeaway

Trading by an insider in the shares of a Company is not in itself violation of law. In fact, trading by the Insiders (directors, employees, officers etc.) is a positive sign which should be encouraged by the Companies as it aligns its interest with those of the insiders. The law on the other hand prohibits trading by an insider in breach of fiduciary and duty of care and confidence towards the stock of a Company on the basis of non-public information to the exclusion of others. Therefore, in our view SEBI action of disposing of the insider trading charges against RPIL holds good. The reason being, PIT Regulations were put in place as a fresh tryout for those having perpetual control over UPSI. As suggested in the Sodhi Committee Report, it placed paramount thrust upon review of empirical evidence and feedback after the concept of trading plan was introduced. In view thereof, the present case at hand goes on to affirm the judicial intent of the PIT Regulation in spirit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source:

http://www.mondaq.com/india/x/583590/Shareholders/SEBI+Disposes+Off+Insider+Trading+Charges+Against+Reliance+Petroinvestments+Ltd

A former Expedia computer support technician was sentenced to 15 months in prison on Tuesday after admitting he stole confidential information from senior executives’ emails to profit from insider trading.

Jonathan Ly, 28, was sentenced by U.S. District Judge John Coughenour in Seattle after pleading guilty in December to a securities fraud charge for having engaged in an insider trading scheme that prosecutors said netted him $331,000.

As part of a plea deal, Ly had also agreed to repay Expedia the $81,592 it spent investigating the computer intrusion. He previously reached a $375,907 settlement with the U.S. Securities and Exchange Commission.

Prosecutors had sought a two-year prison sentence for Ly, a resident of San Francisco, according to court papers. A lawyer for Ly, John Runfola, said he was grateful for the 15-month term the judge imposed.

According to court papers, in 2013, Ly began exploiting his administrative access privileges to secretly review the contents of devices belonging to executives including Expedia’s chief financial officer and head of investor relations.

Prosecutors said that using the non-public information he obtained, Ly executed a series of well-timed trades in Expedia stock options.

Source:

http://fortune.com/2017/04/25/expedia-employee-prison-sentence-insider-trading/

 

Insider trading was at its peak in the 1980s, when a series of mergers and takeovers meant that execs were privy to plenty of market-moving information. The king of insider trading was Ivan Boesky, who became an icon of the era. He ran with some other big financial players, including Michael Milken, who ultimately pleaded guilty to several other felonies, and managed to sidestep insider trading charges.

In 1986, Boesky advised an audience of UC Berkeley students, “You can be greedy and still feel good about yourself.” He made the cover of Time Magazine the same year, which is when the SEC ultimately accused him of trading information from a Drexel Burnham Lambert banker. Boesky settled out of court with a payment of $100 million dollars, then served 22 months in prison.

Ivan Boesky amassed a fortune of over $200 million in the 1980s before an insider trading scandal landed him with a $100 million fine and prison time.
Born in Detroit in 1937, Ivan Boesky studied law before becoming a successful financier and amassing a fortune worth over $200 million dollars. His involvement in a 1986 insider trading scandal, however, ruined his reputation and landed him with a $100 million dollar fine and a prison sentence. The character Gordon Gekko in Wall Street (1987) is rumored to be partially based on Boesky.

White Collar Criminal

Financier, born in Detroit, Michigan. The son of a Russian immigrant, he studied law and worked as a tax accountant before moving into securities analysis, forming his own firm in 1975. Boesky was credited with (or blamed for) pioneering the junk bond market, later a symbol of the excesses of the 1980s. He had become one of Wall Street’s most successful arbitrageurs when he admitted to insider trading charges in 1986. Fined $100 million, he served time in prison before being given parole for good behavior in 1990.

In 1966, Boesky and his wife moved to New York where he worked at several brokerage houses. In 1975, he opened his own firm, the Ivan F. Boesky & Company, with $700,000 (equivalent to $3.1 million in 2016) in seed money from his wife’s family with a business plan of speculating on corporate takeovers. Boesky’s firm grew from profits as well as buy-in investments from new partnerships. By 1986, Boesky had become an arbitrageur who had amassed a fortune of more than US$200 million by betting on corporate takeovers and the $136 million in proceeds from the sale of The Beverly Hills Hotel.Boesky was on the cover of Time magazine December 1, 1986.

In 1987, a group of partners sued Boesky over what they claimed were misleading partnership documents.The U.S. Securities and Exchange Commission investigated him for making investments based on tips received from corporate insiders. These stock acquisitions were sometimes brazen, with massive purchases occurring only a few days before a corporation announced a takeover.

Although insider trading of this kind was illegal, laws prohibiting it were rarely enforced until Boesky was prosecuted. Boesky cooperated with the SEC and informed on others, including the case against financier Michael Milken. As a result of a plea bargain, Boesky received a prison sentence of 3 12 years and was fined US$100 million. Although he was released after two years, he was permanently barred from working in securities. He served his sentence at Lompoc Federal Prison Camp near Vandenberg Air Force Base in California.

Boesky never recovered his reputation after doing his prison time, and paid hundreds of millions of dollars in fines and compensation for his Guinness share-trading fraud role and a number of separate insider dealing scams. Later, Boesky, who is Jewish, embraced his Judaism and even took classes at the Jewish Theological Seminary of America where he had been a major donor; however, in 1987, following the fallout from his financial scandal, The New York Times reported that “after Ivan F. Boesky had been fined $100 million in the insider-trading scandal, the Jewish Theological Seminary, acting at his request, took his name off its $20 million library.”

His involvement in criminal activities is recounted in the book Den of Thieves by James B. Stewart.

Another version of these events is recounted by Jonathan Guinness in his book Requiem for a Family Business which suggests the SEC granted him immunity from prosecution and allowed him to continue to insider trade for significant profit whilst wire tapping him to entrap others.

In a 2012 interview with the New York Times, a cousin of Boesky’s disclosed that he is living in La Jolla, California

Source:

http://www.biography.com/people/ivan-boesky-17169748

WIKIPEDIA

As a compliance officer for Morgan Stanley, Randi Collotta worked with her husband to leak secrets to her friend Marc Jurman, a broker in Florida. The SEC accused the couple of taking $9,000 in kickbacks for trading, and they both admitted they were wrong.

Randi Collotta reportedly cried during the hearing while the couple faced the music. The couple agreed not to appeal the case so long as the sentence was under a certain amount of time.

Randi Collotta was a compliance lawyer at Morgan Stanley and had access to information on several pending transactions, including the 2004 deal by Penn National Gaming to buy Morgan Stanley client Argosy Gaming; the 2005 deal between Adobe Systems and client Macromedia; the 2005 deal by ProLogis to buy Morgan Stanley client Catellus Development; and the 2005 deal byUnitedHealth Group to acquire client PacifiCare Health Systems.

Manhattan prosecutors said Thursday that the Collottas provided material nonpublic information about upcoming deals involving Morgan Stanley clients to Marc Jurman, a Florida-based broker, who traded on the information. Jurman has already pleaded guilty in the case.

The SEC also has been probing whether employees at investment banks are tipping favored hedge fund clients with non-public details of upcoming transactions to keep or win more business.

In the arrest case Thursday, prosecutors said Morgan Stanley research analyst Jennifer Wang passed along material information she accessed at Morgan Stanley to her husband, Ruben Chen, and the two allegedly traded on the information in an account set up in Wang’s mother’s name. They are each charged with one count of conspiracy and three counts of securities fraud, facing a possible prison term of 65 years.

Last week, prosecutors arrested a former Credit Suisse investment banker and charged him with insider trading in several transactions for clients of the firm over the course of the last year, including trading in options of Houston energy firm TXU days before it agreed to a $32 billion buyout by Kohlberg Kravis Roberts and Texas Pacific Group.

Source:

https://www.forbes.com/2007/05/10/morgan-insider-trading-biz-wallst-cx_lm_0510sec.html

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