In a speech before the New York City Bar Association on October
20, Preet Bharara, the United States Attorney for the Southern
District of New York, warned that a Department of Justice
initiative aimed at combating insider trading was in full gear. Mr.
Bharara characterized insider trading as "rampant" and
noted that federal law enforcement authorities were intent on
cracking down on "bad actors not only at Wall Street firms,
but also at Main Street companies." The U.S. Attorney stated
that the government "has devoted significant resources"
to detecting and prosecuting insider trading and will continue to
make use of court authorized wire taps. Mr. Bharara's comments
increased the likelihood that a new wave of insider trading
prosecutions was not far off.
What This Means for You and Your Company
Mr. Bharara's speech highlights the priority federal law
enforcement and regulatory agencies are putting on prosecuting
white collar crime in general and insider trading in particular.
Companies operating in this heightened regulatory environment must
ensure that they have in place adequate safeguards and training to
minimize the chances of falling victim to an insider trading
incident. Companies should take this opportunity to review and
update their anti-insider trading policies and manuals. In
addition, compliance training for your entire workforce is
recommended to ensure that all levels of employees have a firm
understanding of their legal and regulatory obligations. A strong
compliance and training regime is often a company's best
defense to a regulatory inquiry.
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.