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Cady Bar the Door Insight & Commentary on SEC Enforcement Actions and White Collar Crime

Category Archives: Insider Trading

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Phil Mickelson is very glad United States v. Newman is the law in the Second Circuit.

Posted in Insider Trading

Phil Mickelson, whom the SEC describes as a “successful professional golfer,” was not charged with insider trading earlier today.  I wasn’t either, and I’m glad about that.  And you probably weren’t either!  High fives all around.  But mostly, Phil wasn’t charged, and he’s really glad, because that guy was %$&*@! close to being charged with… Continue Reading

Rob Cohen Discusses SEC’s Analysis and Detection Center

Posted in Insider Trading

One other interesting thing coming out of last Friday’s enforcement discussion at SEC Speaks (there weren’t many): Market Abuse Unit co-chief Rob Cohen’s mention of the SEC’s Analysis and Detection Center. First, though, a brief rundown on how the SEC has traditionally started insider trading cases.  In short, they tend to come from outside reports… Continue Reading


Posted in Insider Trading

The law surrounding short swing trading under Section 16(b) of the Exchange Act can be hard.  But the basics are relatively easy.  So easy, in fact, that cartoon characters can lay it out for you in three minutes and 19 seconds.  Take it away, Sally and Mr. CEO:

You Can Settle Your Insider Trading Case with a Negligence-based Charge

Posted in Insider Trading, SEC Litigation

This is almost certainly not true anymore.  But it was true once!  Maybe only once.  Back in October 1991, the SEC sued Shared Medical Systems, a Pennsylvania health care information services company and three of its officers and directors: the company for financial reporting fraud and the individuals for insider trading, among other things.  Here’s… Continue Reading

Two Regulatory Crises

Posted in Cybersecurity, Insider Trading

It strikes me that two civil regulators are facing dire attacks on aspects of their enforcement programs – both in different U.S. Courts of Appeals – at the same time.  Both of these attacks arise out of generalized statutes that only sort of address the problems the regulators seek to remedy.  To some degree, how… Continue Reading

A Non-Insider Trading Case in the District of Massachusetts

Posted in FINRA, Insider Trading

Insider trading prosecutions can be difficult.  Because of the haphazard and tortuous growth of insider trading law itself, the prosecutions involve proving lots of different pesky elements.  Fiduciary duties, materiality, trading . . . . Ugh, the trading.  And the materiality!  So annoying!  If you were a prosecutor, how liberating it would be to bring… Continue Reading

Second Circuit Limits Insider Trading Law for Remote Tippees

Posted in Insider Trading, SEC Litigation

Matt Levine is a big jerk.  He just sits there at Bloomberg following events in finance and securities enforcement, and then writes interesting things about those events really quickly and with insight that no one else has thought of yet.  It’s so obnoxious.  Today he struck again with this piece about the Second Circuit’s huge… Continue Reading

Proposed “Fair Fund” for CR Intrinsic Case Stirs Dustup among SEC’s Commissioners

Posted in Insider Trading, SEC Litigation

In the right kind of enforcement action, the SEC can take the money it’s generated and set up what’s called a Fair Fund to redistribute that money to harmed investors.  But what is the right kind of case?  This procedure was established as part of the 2002 Sarbanes-Oxley law, and it’s relatively easy to contemplate… Continue Reading

Rengan Rajaratnam Settlement Exposes Slightly Weak Point in SEC’s Newish Admissions Policy

Posted in Insider Trading, Parallel Proceedings, SEC Litigation

You remember Rengan Rajaratnam, right?  He broke the S.D.N.Y.’s long streak of insider trading victories when a jury acquitted him in July.  I wondered what the effect on his case with the SEC would be.  Would he settle?  Would he take that one to trial and win, too? Well, he and the SEC came to… Continue Reading

Ghost of David Sokol Haunts SEC’s Insider Trading Case against Szymik and Peixoto

Posted in Insider Trading, SEC Litigation

It never actually became a case, but maybe you remember this matter from a few years ago.  In January 2011, former Berkshire Hathaway executive David Sokol bought about 100,000 shares in Lubrizol Corporation shortly before suggesting to Warren Buffett that Berkshire consider acquiring the company.  Berkshire did acquire Lubrizol on March 14th, and the company’s… Continue Reading