Government enforcement partners Chris Conniff
(New York) and Jim Dowden (Boston), and securities
litigation associate Brendon Carrington have
written "Insider Trading Sentences Get Extra Bite" for
the May 7 issue of Compliance Reporter. The article
examines the U.S. Sentencing Commission's amendments to
increase the recommended sentences for defendants convicted of
federal insider trading crimes and outlines an appropriate
compliance response. The amended guidelines were developed in
response to a Dodd-Frank Act directive and reflect a heightened
interest in crimes committed by hedge fund employees and investment
managers.
The authors write, "So while past practice suggests that
judges have not found the existing insider trading guidelines
insufficient, the proposed amendments will necessarily have a
substantial impact in the field. First, although strict adherence
to the sentencing guidelines is not mandatory, federal district
judges are required to at least calculate and consider the
guidelines sentencing range before imposing a sentence. Judges have
to explain the reasonableness of any downward departure, and the
further below the guidelines range, the better the explanation must
be to survive appeal. As the ranges go up, it stands to reason that
so too will the minimum below-guidelines sentence a judge would be
willing to render. Second, regardless of culpability, a financial
professional accused of insider trading will face increased
exposure, ratcheting up the government's leverage and possibly
altering the plea calculus."
To view the full article, please
click here.
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