Hafiz Naseem did the perp walk last week, and now a husband-and-wife team are expected to plead guilty later this week. This is just the beginning:
The Collottas were charged in March for their role in one of the biggest-insider trading cases to hit Wall Street in years. Federal prosecutors and the Securities and Exchange Commission charged 13 individuals, including the Collottas, with insider trading.
Apparently the feds are trying to make an example of some people, and they seem to have plenty of candidates (Bloomberg):
A study by Measuredmarkets Inc. in August showed that insiders may have traded illegally before 41 percent of the largest U.S. acquisitions the previous year. The review examined stocks in deals bigger than $1 billion.
"As the merger market has heated up in the past year, we have seen an uptick in insider trading that has victimized major investment banks, harmed the average investor, and undermined public confidence," said U.S. Attorney Michael Garcia in New York.
"We will move quickly against those who steal confidential information and trade on it," Garcia said.
The study of insider trading is an academic cottage industry, and a spate of enforcement actions will surely produce a new round of papers on the efficacy of insider trading prohibitions, many of which will conclude that enforcement is biased, ineffective, and/or counterproductive. In the end, however, the public seems unwilling even to entertain the notion that insider trading should be legalized.
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