Sunday, May 27, 2007

No Insider Trading Is Too Small for the SEC These Days

The SEC's crackdown on insider trading is bringing in some fairly small cases.  In one case, the two defendants learned about the buy-out of Serologicals and the next day bought 500 and 400 shares.  When the deal was announced the following day, the stock jumped 34%, and the defendants made $3,785 and $2,897.  Not a bad gain on a one-day investment, but still fairly small potatoes for the SEC.  Nevertheless, the defendants settled a civil enforcement action by disgorging their profits and paying a one-time penalty plus interest, for a total of a bit less than $14,000.  The SEC Litigation Release (here) discusses the filing. In a second case, the Commission settled an insider trading claim for trading by the son of former Ohio State University business professor Roger Blackwell, who was convicted on insider trading charges and sentenced to six years (see earlier post here).  The son made $4,317.01 based on a tip from his father, and will disgorge his profits plus pay the usual one-time penalty plus interest (Litigation Release here).  The SEC's push on insider trading seems to know no minimum, so beware. (ph)

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» Best in Class Contest: What is the Smallest Insider Trading Case Ever? from Best in Class
The White Collar Crime Prof Blog has this recent post about some small potatoes insider trading cases that the SEC has brought lately (for ill-gotten gains of $3,785, $2,897 and $4,317.01). The post made me wonder: what is the smallest [Read More]

Tracked on May 29, 2007 1:05:39 PM

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